Insurance Regulatory and Development Authority of India (IRDAI) on Wednesday permitted general insurers to issue sophisticated add-ons for motor insurance policy. These are telematics-based motor insurance plans for which the premium depends on usage of vehicle or driving behaviour.
"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," Irdai said in a statement.
In its continuous efforty to protect the interest of the policyholders and increase the insurance penetration in India, the IRDAI has been seeking to facilitate the industry to move with the times, it said. As a step towards facilitating technology enabled covers, the regualtory has permitted general insurance companies to introduce tech-enabled concepts for the Motor Own Damage cover including Pay as You Drive and Pay How You Drive.
Pay as You Drive is a comprehensive motor plan where premium would depend on usage of vehicle while Pay How You Drive premium would be linked to driving behaviour. The regulator has also allowed floater policy for vehicles belonging to the same individual owner for two wheelers and private cars.