IRDAI Allows Innovative Add-ons, Floater Policies For Vehicle Insurance
To enhance the market penetration of motor insurance policies, IRDAI has introduced some innovative motor insurance plans, including pay-as-you-drive and floater policies.
Author:Stefano MclaughlinReviewer:Luqman JacksonSep 21, 2022176 Shares2.3K Views
To enhance the market penetration of motor insurance policies, IRDAI has introduced some innovative motor insurance plans, including pay-as-you-drive and floater policies. Purchasing these plans will allow you to pay according to the usage of your vehicle or the distance it travels.
As a result, it can significantly help you reduce the cost of your motor insurance plan, especially if you drive less or prefer public transportation.
All about Pay-as-You-Drive Plan
The pay-as-you-drive policy lets you customise the motor insurance policy according to the kilometres your car is expected to run. As a result, you can cut down the cost of your insurance plan if you drive less.
This pay-as-you-drive plan works as a comprehensive vehicle insurance policy, which includes both the own damage cover and third-party cover components. While buying this policy, you need to choose a range of your vehicle's usage. After this, your insurer will assess the price of the plan. Nevertheless, if you exhaust the pre-set kilometre limit, you have the option to top up your current plan.
Features and benefits of Pay as You Drive Plan
Here are some notable features of this type of motor insurance plan:
- Insurers let customers buy this policy in different slabs. For example, you can get slabs – lower than 3000 km, between 3000 and 5000 km, between 5000 and 7500 km, and over 7500 km.
- The insurance provider installs a telematics device on your car to track the distance it travels. Some insurers also come with a mobile app, installing which you can get several significant insights about your insurance plan.
- You need to upload a short video of your odometer to claim the policy benefit.
Inclusions of Pay as You Drive Plan
The following are the conditions covered by this motor insurance policy:
- Theft of your vehicle
- Accidental damages to your vehicle
- Damages in your car due to man-made or natural calamities, including riots, floods, etc.
- Injuries or damages caused to third-party people or properties
Exclusions of Pay as You Drive Plan
Following are some exclusion criteria of this insurance plan:
- Damages caused to your vehicle under the influence of intoxicants
- Depreciation value of your vehicle
- Damages caused due to mechanical or technical failure
- Accidental damages to your vehicle while riding it without a valid license
Add-ons of Pay as You Drive Plan
- Roadside assistance cover
- Engine protection cover
- Return to invoice cover
- No claim bonus protection
- Engine protection
All about Floater Motor Insurance Plan
IRDAI (Insurance Regulatory and Development Authority of India) objectively introduced new floater polices as they plan let you cover multiple private vehicles, including both cars and bikes, under one motor insurance policy. You just need to ensure that all the vehicles to be included are registered under your name.
Insurers, generally allow you to opt for either the standalone own-damage insurance plan or get the comprehensive vehicle insurance policy. If you choose the own-damage floater plan, the price of your premium will be less, but you have to buy separate third-party policies for all your vehicles. By purchasing the comprehensive floater insurance plan, you can avoid the inconvenience of buying different third-party policies.
Features and Benefits of Floater Motor Insurance Plan
Following are some significant features of this type of motor insurance policy:
- You can conveniently customise your policy by including or excluding vehicles. Nevertheless, you need to check the maximum number of vehicles you can cover under this plan while adding vehicles.
- You can get your vehicles covered at a lower price by purchasing this floater motor insurance plan. This is because you do not have to buy separate policies for all your vehicles.
- The premium amount largely depends on the overall distance your vehicles cover on average. Furthermore, while deciding the premium, the insurer also ensures that you abide by the traffic rules and drive safely.
- By covering multiple vehicles under one plan, you can easily manage the policy and renew it timely.
Inclusions of Floater Motor Insurance Plan
Following are the aspects covered under this single plan:
- The insurer provides accidental damage protection of all your covered vehicles.
- Damages caused by man-made or natural disasters, such as riots, cyclones, earthquakes, floods, etc., remain covered under this plan.
- If you purchase a comprehensive insurance plan, third-party damages and injuries are also covered.
- You can also get the policy benefits if insured vehicles get stolen.
Exclusion of Floater Motor Insurance Plan
Following are some exclusions of this floater policy:
- Replacement or repairing of worn-out car parts
- Depreciation cost of your vehicles
- Mechanical or technical breakdown
- Damages caused under the influence of intoxicants
- Damages caused if you drive without a valid license
In conclusion, pay-as-you-drive and floater plans have focussed on assessing the usage of vehicles to determine the premium. These innovations in the motor insurance policy aim at reducing the cost of holding or maintaining insurance policies for those who drive less and carefully. Whether you want to have a pre-owned caror a new one, it is mandatory under Motor Vehicle Act to have a car insurance. So if you car insurance is about to expire, renew it before you lose all your benefits.
Stefano Mclaughlin
Author
Luqman Jackson
Reviewer
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