New Motor Insurance Rule – “Pay as you drive, how you drive”

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Motor insurance can be costly. A fixed premium must be paid each year for those who purchased an automobile in the last few years. However, the Insurance Regulatory and Development Authority of India(IRDAI), has released a set of new motor insurance rules. These will allow users to purchase insurance according to their automobile usage.

Also, read: Benefits of renewing your insurance on time 

The new rules could make it easier to get motor insurance.

The IRDAI stated in a notification that technology-enabled additions for own damages (OD) motor insurance is designed to give flexibility to automobile owners. They can pay for insurance based upon their driving record, while general insurers offer dynamic insurance coverage. Individuals with multiple vehicles will be able to obtain a single policy for all their motor vehicles through the floater policy. The premium will be affected by the telematics-based motor policy. Less driving and safer driving will result in lower premiums. This will be a benefit to the entire automotive insurance ecosystem. 

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(Automotive insurance premium could change with the new set of rules) 

Also, read: How to Calculate Your Insurance Premiums

“This is a positive step towards the larger goal of encouraging better driving behavior on Indian roads. For now, you might only pay for your drive. But, the end goal is to lower the insurance premium if we follow road safety norms. Entire ecosystem, be it insured, insurance companies and partners will get benefitted from this in long term”, said, Vivek Sharma, Founder & CEO, Fixcraft.

“The concept of motor insurance is always evolving. With the advent of technology, the insurance sector has been able to meet the challenging and interesting needs of millennials at a rapid pace. IRDAI stated in a statement that the general insurance industry must keep up with the evolving needs of policyholders and adapt accordingly.

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