Pay-as-you-drive insurance
The Insurance Regulatory Development Authority (IRDA), keeping pace with advances in technology announced add-on covers to the Motor – Own Damage Policy; The Pay-as-you-Drive and Pay-How-You-Drive are two add-on covers intended to harness technology giving insurers the ability to customize their motor insurance. Version 1.0 of these add-ons are based merely on declarations made by customers and providing information on odometer readings. However, given the advances in automobile telematics, Pay-as-you-drive and Pay-how-you-drive will soon become more than just catch-words. On-board Diagnostic and Reporting devices, GPS, and wireless communication capabilities come together to provide the ability to compute premiums based on vehicle usage, driver behavior, location, and vehicle condition. This opens the possibility for dynamic pricing of premiums based on how often owners use their vehicles. Where owners have more than one vehicle, it also gives the opportunity to apportion p...