The Insurance Regulatory and Development Authority of India (IRDAI) has permitted general insurance companies to introduce tech-enabled concepts like "pay as you drive" and "pay how you drive" for motor insurance cover.
"The concept of motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials," the insurance regulator says, adding that the general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders.
IRDAI says it has been seeking to facilitate the industry to move with the times. And 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, it adds.
IRDAI said it has allowed floater policy for vehicles belonging to the same individual owner for two wheelers and private cars as it looks to protect the interest of the policyholders and increase the insurance penetration in India.
These covers will be provided as add-ons to the basic policy of Motor OD, the regulator says in a statement.
Introduction of the above options will aid in giving the much needed fillip to Motor Own Damage Insurance in the country and increase its penetration, IRDAI says.
This comes days after Union Minister for Road Transport & Highways Nitin Gadkari said that the government is looking to reduce road accident deaths by 50% by 2024.
"In India, every year we have 5 lakh accidents and 1.5 lakh deaths and 3 lakh serious injuries. There are 400 accidental deaths per hour in the country. The socio-economic loss due to this is 3.14% of our GDP and 70% deaths are in the age group of 18-40 years," the Union minister had said. "We need to work on road engineering, automobile engineering, enforcement, education, and emergency medical services," he said.
Gadkari attributed road accidents to faulty detailed project reports. "DPRs are of poor quality. The principle in DPR is that the lowest bid is the best bid. That is the problem with the DPRs. We need to use new technologies to prepare DPRs," Gadkari said.
"We have decided to make six airbags mandatory for cars. Some of the company people are constantly making opposition for that. We want to save the lives of the people and that is the reason we need cooperation from the stakeholders," Gadkari said, adding that there is higher domestic demand for star ratings cars, which are much safer.
"Some of the companies are making same brand cars in India which are not up to the standard but they are making the same cars with international standards for the overseas market," the minister said. "When India has got a lot of accident deaths, then why are these companies not taking this seriously?" he asked.