In order to facilitate technology-enabled insurance coverage covers, the Insurance Regulatory and Development Authority of India (Irdai) has permitted general insurance coverage corporations to introduce ideas comparable to “pay as you drive”, “pay how you drive”, and floater insurance policies for automobiles belonging to the identical particular person proprietor for two-wheelers and personal vehicles as add-ons in motor own-damage insurance policies.
According to the insurance coverage regulator, introduction of such add-on choices will help in giving the a lot wanted fillip to motor personal harm insurance coverage in the nation and enhance its penetration.
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The idea of “pay as you drive” primarily stems from the truth that policyholders will probably be charged premiums based mostly on the utilization of their car, or the time they spend behind the wheel or the gap they cover. Similarly, “pay how you drive” follows the idea of consumers paying premiums on the premise of their driving requirements, or how safely they drive. Further, floater insurance policies for homeowners of multiple two-wheeler and/or automotive are designed to make issues simpler for them by obviating the necessity to purchase separate insurance policies for every automobiles.
“This is certainly going to help insurance players by providing them with better rating parameters, which will be driver-based, not asset-based. The ratings will separate the good drivers fron the bad, where the former get discounts and latter pay higher premiums. These add-ons will essentially benefit policyholders who drive carefully or drive less. Earlier there was no mechanism to differentiate between the different categories of drivers but now they can be differentiated”, mentioned a senior government from a personal insurance coverage firm.
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