Following the announcement by the Insurance Regulatory and Development Authority of India (IRDAI) allowing general insurance companies to introduce telematics-based concepts in Personal Injury (OD) insurance policies, Go Digit General Insurance has launched “Pay as you Drive” (PAYD) add-on feature in auto insurance policy. Pay as you Drive policies charge a lower premium when the vehicle is driven less and charge more when it is driven more. Here, the premium is based on an insured’s risk exposure and the distance traveled.
Under the Go Digit insurance policy, the discount will apply to anyone driving less than 10,000 kilometers per year on average from the time the current owner purchased it from the showroom. Digit will use the odometer reading, telematics data and chosen annual mileage to grant this discount, which can be up to 25%.
PAYD policies are beneficial for those who don’t drive their car much but still have to pay the same premium as a heavy-duty driver. Small town dwellers and people with multiple vehicles and retirees can benefit from the product if their usage is less.
Kunal Jha, Head – Motor Products and Actuarial, Digit Insurance, said, “The company’s customer-centric approach and technological agility allowed us to launch the feature in record time. This usage-based add-on is initially launching with a cap of 10,000 km so that as many people as possible can profitably benefit from insurance. This will also be available through our partner distribution network, which also contributes the majority of our automotive business in Tier 2, 3 and 4 cities.”
Recently, Edelweiss General Insurance also launched SWITCH, which is an on-demand comprehensive car insurance product, as part of IRDAI’s Sandbox initiative. Recently, IRDAI released guidelines for insurance companies to launch telematics-based auto insurance policies.
As part of the policy, the app detects movement and automatically activates insurance when the vehicle is driven, which is convenient for customers. Additionally, it rewards policyholders for driving well, as it measures both the quantity and quality of driving and calculates premiums accordingly.
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