Now you can buy a motor insurance policy based on your driving behaviour. The Insurance Regulatory and Development Authority of India (IRDAI) has allowed general insurers to launch telematics-based motor insurance covers such as ‘Pay As You Drive’ and ‘Pay How You Drive’. The insured will also be able to pay the premium based on how much and how much he drives.
Apart from this, if you have more than one vehicle, then you will be able to take floater motor insurance for them in the same way as you currently take in health insurance. A person having more than one vehicle in a floater policy need not take separate policies for different vehicles. The premium will be slightly higher than that of a customary policy, though it will be much cheaper than buying multiple policies.
Allowed to add 3 new add-ons
IRDAI has allowed general insurance companies to add 3 new add-ons. These add-ons are Pay As You Drive, Pay How You Drive and Floater Policy. Floater policy will be for more than one two wheeler and same owner of the car. Ashwini Dubey, Motor Insurance Renewal Head, PolicyBazaar.com, said, “The new rules will be of great benefit to those who do not drive regularly or have more than one car.
For example, if a person named A drives his car 200-300 km per month, and person B drives his car at 1200-1500 km per month, they will get the same premium under the ‘pay-as-you-drive’ model. will not have to pay. Apart from this, people who drive more safely and have less accidents will also have to pay less premium.
Udayan Joshi, President, Liberty General Insurance, said, “This is a welcome move by the regulator, especially at a time when the pandemic has changed the way we work and travel. This add on cover will surely attract customers working from home. This is because work from home has reduced the kilometers of driving a car.
In these ways, the insurance premium of the car will be reduced.
- Avail No Claim Bonus
- Third Party Cover for Used Vehicle
- Install Anti-theft Devices
- Voluntary Deduction Reduces Premium
When no claim is made during the year, the insurance company offers a ‘No Claim Bonus’ (NCB), which starts at 20%. NCB up to a maximum of 50% can be availed for 5 consecutive claim-free years. The NCB exemption allows your premiums to come down significantly. This ensures that you opt for NCB during claim-free years. If the car is of nominal value, avoid claiming it, as it will break your no-claim league and you will not be eligible for NCB next year.
Almost all insurance policies have a mandatory deductible. This is the claim amount that the insured has to bear. Suppose the deduction in your policy is Rs 1,000 and your claim amount is Rs 10,000. This means the insurance company will pay you Rs 9,000 and you will bear the cost of Rs 1,000. Compulsory deduction is decided by the insurance company. It has no effect on premium. But it can help reduce the cost of premium if you are willing to bear a higher amount during higher deductibles and losses.
There are two elements to your car insurance. Third party cover and own damage cover together they form a comprehensive cover. A third party cover is a mandatory requirement for driving a vehicle on the road, whereas own damage is voluntary. If your car is more than 10 years old, you can skip this component and save premium by only taking third party cover.
Anti-theft devices have their own importance in providing protection against theft. There are two major benefits of installing it, it helps in enhancing the safety of your car. Second, if you have an anti-theft device fitted in the car, insurers offer a discount on the premium. It is important to note that you will be eligible for the discount only if the device has been approved by the Automotive Research Association of India (ARAI).