By Ashwini Dubey
While the pandemic and the times of restricted mobility may have been over, for now, there’s no denying that it has changed the world forever. If we look back, the silver-lining from the Covid-19 era was technological innovation across the globe. One such welcome move at a time when vehicles lay parked in garages or bases, more often than they were driven, was the regulatory sandbox launch of pay-as-you-drive policies by the IRDAI (Insurance Regulatory and Development Authority). The innovative product allowed the policyholder to pay the premium as per usage and save up on the premium.
As times evolved, so did policies, and the regulatory body started taking into account the changing driving habits of people. Recently, the IRDAI announced the official launch of add-ons such as ‘pay-as-you-drive’, ‘pay-how-you-drive’ and ‘family floater’ policies. With technology helping these innovations, let’s take a look at how you can now easily customize your motor insurance policy and premium as per your usage and driving habits.
Save premium with the new pay-as-you-drive policies
While we are far from the times of complete lockdowns, mobility has permanently been changed for sure. Many companies have decided to go fully remote, while others have adopted the hybrid approach. Additionally, several people still practice restricted contact and Covid-19-safe practices owing to ailing elderly members or small children at home. People also avoid taking their cars out to avoid traffic and opt for public transport or cabs instead. As one would imagine, the vehicles in these cases wouldn’t be driven to full capacity but the owners might 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 as per their driving frequency and preference. Under this, there are different options available for the policyholder. Some insurance companies have come up with kilometer-based premiums, while some have a switch-on-switch-off mechanism in the policy. There’s a tracking device or a mobile app that’s used to track the kilometers. Alternatively, one can switch off their insurance policy for days they don’t drive their vehicle.
Get rewarded for good driving with the pay-how-you-drive feature
Now, safety is not the only perk for driving safely and responsibly. Basis your risk profile, you can opt to pay a lower premium. Under the pay-how-you-drive add-on, the risk associated with violating traffic rules, disobeying traffic lights, crossing the speed limit and subsequently making too many claims is taken into account. Once again, the tracking device and algorithms will be used to analyze the driving habits of the policyholder and they will be rewarded with a lower premium for safe driving.
Aside from a discount on premium, this innovative add-on will also help inculcate good driving habits amongst vehicle owners.
Cut down on premium with family floater plans
What used to be a popular feature in health insurance policies is now available for motor insurance, too. While safety on the road is paramount, motor insurance could be a costly affair for families that own multiple vehicles. Quite possibly, one could have an SUV for far-off family outings or road trips and have another hatchback or sedan for regular use. Not to mention, two-wheelers are part of every household and need to be insured, too. Now, with a floater policy, one can easily cover all their vehicles and bring down the premium. This works excellently for owners who might have multiple vehicles registered in their name. One family floater plan would cater to the needs of several vehicles and ensure their protection.
The author is head, Motor Insurance Renewals, Policybazaar.com