Months after the Insurance Regulatory and Development Authority of India (Irdai) invited applications for a regulatory Sandbox, there is a proposal to introduce own damage motor floater policies.
As per a Mint report, the highlight of this policy, which was approved by IRDAI is that you can include multiple vehicles in one motor insurance policy and allows a lot of flexibility.
The background to this is the move by IRDAI last year in which the insurance companies were asked to offer innovative products . It is reported that there were 173 proposals in all of which 33 received the nod from IRDAI.
The policy being highlighted here is the own damage floater policy. Three insurers, ICICI Lombard General Insurance Co. Ltd, Reliance General Insurance and Edelweiss General Insurance are going to be offering this policy. Flexibility is the key feature in this policy. Damages to vehicles on regular usage can be included in the cover. You could combine your two-wheeler and four-wheeler in the same policy. The premiums for these policies will be based on the usage. Customers can add or delete the vehicles to be covered as they please. The premium will be defined on the basis of the vehicle carrying the highest value.
Factors like the usage and the behaviour of the driver also come into play.
IRDAI has mandated that the policies of this nature be issued as proof of concept products and only a small window between February 1, 2020 and July 31, 2020 has been permitted for issuance of these policies. This would therefore be an experimental or pilot scale attempt.
The details of how these polices will work are yet to be shared and may be out in the next few days so that customers can subscribe to these policies from the first of the next month. Customers will be keen to know how the premiums will be calculated and what benefits can accrue by availing these policies. It’s a challenge for the insurance companies too as they have to find the way to structure the premium within one single policy for multiple vehicles, say one costing Rs 50 lakhs and another just Rs 5 lakhs.