Insurance regulators are also proposing floater covers for vehicles. Vehicle owners can target multiple vehicles with a single policy, just as the floater health policy covers all members of the family. Floater insurance is very popular in health insurance, but it is arguable whether they are the preferred choice for car insurance. Family-owned vehicles are usually registered under different names and can be a hurdle for such floater covers.
Irdai also allows insurance companies to offer discounts based on the quality of their driving. Telematics devices are attached to the vehicle to monitor the condition of the vehicle and the driving habits of the user. This data is then interpreted to give a discount to a careful driver. You can also penalize rashes and negligent drivers. These developments seem to be good news for those who own multiple vehicles or who don’t drive much due to Covid’s limitations. If their car isn’t used much, they don’t have to pay a full premium. “The introduction of these options will help give Philip a very necessary amount of damages to the country’s motors themselves and increase their penetration,” Irdai said in a statement.
As expected, the insurance industry is praising this move. “This is a transformational development in the category of automotive insurance, which encourages utility-based insurance purchases and promotes safe driving habits,” said Sanjay Datta, Underwriting and Insurance Chief. increase. “Irdai has created a mutually beneficial situation. It is now possible to adjust its own range of damage based on the customer’s driving behavior. It uses less vehicle, takes care of the vehicle, and It benefits customers who follow traffic rules, “said Rakesh Jain, CEO of non-life insurance.
However, closer examination reveals that such policies offer only limited benefits. The discounts offered at Premium are not very exciting (see table). If you choose a 7,500 km slab, you will get a 10% discount from the regular premium. As a reminder, the discount applies only to your non-life insurance premiums and does not affect mandatory third party premiums or other add-on covers. The discount is a bit more attractive at the lower limit of 2,500km, but it’s an average commute of less than 7km per day. Consider it before choosing a low slab policy.
The good news is that if a buyer decides to drive beyond the slab limit, they can switch to a higher slab or switch to the usual unlimited policy. However, this upgrade must be performed before the threshold limit is exceeded. It cannot be upgraded after an accident or complaint. “If a customer exceeds the declared usage, the insurer needs to clarify the process of resolving the claim,” said Supriya Rathi, Whole Time Director of Anand Rathi Insurance Brokers.
Installing telematics devices is another annoying problem as it raises privacy concerns for car owners. There is no doubt that insurance premiums will go down, but this discount comes at a cost. Choose it only if you are happy with the idea that the insurance company has 24/7 data on your car movements.
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