By Ashwini Dubey
Even if the pandemic and the times of restricted mobility are over for now, there is no denying that it has changed the world forever. If we look back, the silver lining of the Covid-19 era was technological innovation around the world. One such welcome move at a time when vehicles were more likely to be parked in garages or basements than driven was the introduction of pay-as-you-drive policies by IRDAI (Insurance Regulatory and Development Authority). The innovative product enabled the policyholder to pay the premium based on consumption and save on the premium.
Over time, the guidelines also evolved and the regulator began to take into account people’s changing driving habits. Recently, IRDAI announced the official launch of add-ons such as Pay-as-you-drive, Pay-how-you-drive and Family Floater policies. Let’s take a look at how, with the technology powering these innovations, you can now easily tailor your auto insurance policy and premium to your usage and driving habits.
Save on premium with the new pay-as-you-drive policy
While we’re a long way from the days of full lockdown, mobility has certainly changed forever. Many companies have opted for a full remote solution, while others have taken the hybrid approach. In addition, several people are still practicing limited socializing and Covid-19 safe practices at home due to ill elderly members or young children. People also avoid driving their cars to avoid traffic, opting for public transport or taxis instead. As one can imagine, in these cases the vehicles would not be fully utilized, but owners may still be paying the full premium.
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In such situations, the pay-as-you-drive add-on allows the policyholder to pay the premium according to their driving frequency and preference. Various options are available to the policyholder. Some insurance companies have introduced mileage based premiums while others have an on/off mechanism in the policy. There is a tracking device or mobile app that tracks the miles. Alternatively, you can turn off your insurance for days when you don’t drive your vehicle.
Get rewarded for good driving with the pay-how-you-drive feature
Well, safety isn’t the only benefit to safe and responsible driving. You can opt for a lower premium based on your risk profile. The pay-how-you-drive add-on takes into account the risk associated with violating traffic rules, ignoring traffic lights, exceeding the speed limit and then overcharging. Again, the tracking device and algorithms are used to analyze the policyholder’s driving habits and they are rewarded with a lower premium for safe driving.
Aside from a premium discount, this innovative add-on will also help inculcate good driving habits in vehicle owners.
Reduce the premium with family floater plans
What used to be a popular feature in health insurance is now also available in car insurance. While road safety is of paramount importance, car insurance can be a costly affair for families who own multiple vehicles. It’s possible that you could have an SUV for family outings or long-distance road trips and another hatchback or sedan for regular use. Not to mention that two-wheelers are part of every household and must also be insured. Now you can easily cover all your vehicles with a floater policy and lower the premium. This works great for owners who may have multiple vehicles registered in their name. A family floater plan would accommodate the needs of multiple vehicles and ensure their protection.
The author is Director, Motor Insurance Renewals, Policybazaar.com