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Pay As You Drive: IRDAI Enables Usage-Based Vehicle Insurance in India
- Category: Vehical Insurance
- Date: 07-07-2022
The Insurance Regulatory and Development Authority of India (IRDAI) has taken a major step toward modernizing vehicle insurance by permitting general insurance companies to launch ‘Pay As You Drive’ and behaviour-based motor insurance policies.
These innovative offerings use technology to track how much and how well a person drives, allowing insurers to calculate premiums accordingly. This move is expected to benefit low-mileage and safe drivers, helping them save on their insurance premiums.
“As a step towards facilitating technology-enabled covers, IRDAI has permitted general insurance companies to introduce tech-enabled concepts for the motor own damage (OD) cover,” the regulator said in an official statement.
IRDAI has also allowed insurance companies to introduce floater policies for multiple vehicles owned by the same person, a decision that could significantly reduce costs for families and businesses with more than one car.
Industry experts have welcomed the move.
Jasleen Kohli, MD & CEO of Digit Insurance, said:
“This will encourage insurers to come out with new tech-enabled motor products and increase competition... ensuring better value for customers.”
These steps align with the evolving expectations of modern consumers, especially millennials, who demand personalization, flexibility, and value in their insurance policies.