Telematics will determine your car insurance premiums by tracking your driving pattern and skills
A committee constituted by the Insurance Regulatory and Development Authority of India (IRDAI) to examine the pricing aspects of third-party motor insurance plans has recommended that telematics be used to determine insurance premiums in the future. It will monitor the driving habits, vehicle usage, and the distance covered to evaluate the insurance premium for that vehicle for the corresponding year.
Presently, motor insurance premiums in India is based on factors like make, model, and engine capacity of the vehicles. Third-party insurance premiums are fixed by the IRDAI annually after reviewing the number of claims made during the incumbent year.
But after the implementation of new recommendations by the IRDAI panel, insurance premiums would be determined with the help of sensors fitted to the vehicle, which will transmit the wireless signals to the telecom networks and other wireless mediums. It is generally a black-box which can track your driving pattern and skills to help the insurers in evaluating the insurance premium for your vehicle.
What this will mean is that your driving habits and the total distance covered by you each day will become major components in determining your car insurance premiums. It implies that if you drive your car carefully, covering small distances, and drive predominantly during the off-peak hours, you will have to pay a lower amount for your car insurance policy
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It will also help the insurers evaluate specific risk factors and determine the insurance premiums for each vehicle more accurately, and reduce the number of fraudulent claims by studying the driving data during an accident.
"Telematics helps insurers estimate accident damages more accurately, and reduce fraud by enabling analysis of driving data (such as hard braking, speed and time) during an accident," said the IRDAI statement.
*Source: Zee Business
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