BBN Bureau
HYDERABAD/July 06-2022: The Insurance Regulatory and Development Authority (IRDA), in an innovative move on Wednesday (July 6), allowed insurance companies to issue three add-on features to motor insurance policies.
A statement issued by the insurance regulator, IRDA, said it has permitted general insurance companies to introduce the tech-enabled concepts such as Pay as You Drive; Pay How You Drive and Floater policy for vehicles belonging to the same individual owner for two-wheelers and private cars, as add-ons to the Motor Own Damage (OD) cover.
The Pay as You Drive concept will allow insurers to introduce plans linked to the usage of the vehicles. In simple terms this means that those who drive their vehicle less would pay lesser premiums.
The Pay How You Drive concept would be linked to the way the insured drive their car. Bajaj Allianz General Insurance chief technical officer (CTO), TA Ramalingam, said the customers do not necessarily use their vehicles in a similar manner and hence ‘The Pay as You Drive’ feature will certainly be an attraction.
“Some customers may have a lesser frequency of vehicle usage, or they prefer to use public transport or organisational transportation facilities,” he explained further.
“The Concept of Motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials. The general insurance sector needs to keep pace with, and adapt to the changing needs of the policyholders,” the IRDA statement added.
In its perpetual endeavour to protect the interest of the policyholders and increase the insurance penetration in India, IRDAI has been seeking to facilitate the industry to move with the times.
IRDA believes the introduction of the new add-ons will aid in giving the much-needed fillip to Motor OD Insurance in the country and increase its penetration.
