Own Damage Vehicle Insurance Rules To Be Changed From 1st August 2018. In India, it is mandatory to have at least third-party vehicle insurance before plying it on the roads. The compliance for this mandate is not much but it does not provide any cover for own vehicle damage.

• IRDAI has now decided to allow insurance companies to introduce the Pay As You Drive, Pay How You Drive and floater policy (for those who have more than one vehicle) as add-ons in a motor insurance policy

Giving way to ‘archaic’ auto-insurance policies, the Insurance Regulatory and Development Authority of India (IRDAI) has now decided to allow insurance companies to introduce the Pay As You Drive, Pay How You Drive and floater policy (for those who have more than one vehicle) as add-ons in a motor insurance policy based on the owner’s driving history, i.e. how he/she drive the car.

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, IRDA said in the notification.  And as a step towards facilitating technology enabled covers, IRDAI has permitted general insurance companies to introduce the tech-enabled concepts for the Motor Own Damage (OD) cover, it added.

Here are the 3 types of insurance covers

Pay as You Drive: This will allow the users to pay for the insurance as per their usage. That is the customer has to make approximate declaration of planned usage which then can be tracked using an app with geo-tagging. Meanwhile, the insurance company will also have to clarify the process of settling a claim in case the customer exceeds the declared usage

Pay How You Drive: This add-on will depend on how you drive your car. For this, customers will have the option to choose live-tracking of their driving in terms of speed and usage etc. The insurance company, on the other hand, will offer a pricing based on these parameters.

Floater policy for vehicles belonging to the same individual owner for two-wheelers and private cars: In case, a customer has more than one vehicle – two-wheeler and four-wheeler, he can opt for this cover for all the vehicles.

How it will benefit the insured?

Through these, customers will be able to better manage the insurance policies of their multiple vehicles and have affordable premiums as they will pay according to their vehicles’ usage and how they drive it, Naval Goel, Founder and CEO of PolicyX.com, pointed out

“Riders like ‘Pay how you drive’ lead to lower premiums charged if a customer drives mindfully thus promoting good driving patterns.”