26-Oct-2023
2 mins read
New Add On scheme by IRDA – Pay As You Drive and Pay How You Drive
In a major development in the insurance sector, the regulator of the insurance industry in the country has allowed the insurance companies to issue add-ons for motor insurance policies. These add-ons have some unique changes which include buyers to subscribe to plans in accordance with their daily usage of the insured vehicles, and driving behavior.
Among one of the most discussed add on in the above mentioned changes is the – Pay as You Drive and Pay How You Drive. This concept will allow insurance companies to introduce plans which will be linked with the usage of the vehicles. In simple terms, this means that the insured can now pay the premium according to the usage of the vehicle. The Pay How You Drive concept would be linked to the way the insured drives the car. Any person who has a bad and fast driving hand would have to pay more premium as risk also increases for the insurer in such cases.
In the aforesaid mentioned scheme, the policy would be valid for a specified number of kilometers and it will benefit those who have less usage of their vehicles. Though on the other hand, this would be a expensive move for the people who have la very large usage of the vehicles.
In this concept, the premium will also depend on the driving pattern and the vehicle health, it will benefit to safer driving and the less pollution. Now expect these new add on will definitely open new markets for the companies and also will be beneficial for the customers as well.
