NEW DELHI: Now, the cost of a motor insurance policy would depend on the way you use your vehicle. The insurance regulator has allowed general insurers to launch add-on motor insurance plans, which would be priced as per the use of the vehicle.
The Indian Insurance Regulatory and Development Authority (IRDAI) has allowed insurers to design add-on-own damage (OD) insurance plans based on concepts like Pay-as-You-Drive and Pay-How-You-Drive. The introduction of these add-ons means that you can now purchase motor insurance that bases the cost of the policy’s premium on how you drive.
If a person uses his vehicle sparingly, he may have to cough up less in buying an add-on cover. Own damage insurance cover offers financial assistance in case your vehicle gets damaged in an accident or otherwise. Vehicle insurance has two components – third party (mandatory) and own damage cover.
IRDAI said in a notification that the purpose of introducing these options is to give the much-needed flip to Motor's own damage insurance and increase its penetration.
“With the new IRDAI guidelines, customers will benefit and will have better control over the upfront insurance cost as the premium will be based on kilometres driven by the vehicle,” said Ashwini Dubey, head of motor insurance renewals, Policybazaar.