Working from home has become a norm, and many insurers have made the vital decisions regarding their car insurance premium. When the user is not actively driving his vehicle on the road, paying the traditional car insurance premium hasn’t been displayed as a fair option for many. Hence, the system introduced telematics or usage-based insurance or "pay per use" car insurance in which the car mileage helps calculate the premium. The concept of usage-based auto insurance is gradually gaining ground in India. The car insurance premium is based on the distance travelled and the driving behaviour.
Telematics is an innovative and technologically-advanced branch of information technology that deals with the automated transmission of the car and driving information over long distances. Today the term "telematics" is associated with the automotive industry, particularly concerning monitoring and tracking.
Telematics-based auto insurance is a constructive way to evaluate technology-based insurance policies. Compared to the existing model on recent and generalised data for underwriting auto insurance policies, it will tip the scales in favour of reliance on relatively recent driving data.
How to Declare Driving Statistics Using Telematics Car Insurance?
The driving and usage reports are automatic. The insurance company can easily track your journey in several ways and generate their analysis. Advancements in digitally-enhanced tools offer many possibilities like:
- Telematics using a Mobile App – You have to install the app on your smartphone and adjust privacy settings so your and your car's movements can be tracked.
- Telematics Report Using a Plug-in Device – Telematics can track driver performance using a tracking device.
- Telematics Using GPS Devices and Onboard Sensors – These can display necessary vehicle and driving-related information, which can be accessible by car insurance companies on a real-time basis.
- On-board sensors which can display informational statistics and details about driving and vehicle mechanisms can be installed in the vehicle.
- Detection of Mileage - The purpose of the installed telematics device is to take note of the distance crossed by the vehicle.
Advantages of Telematic Insurance
Here are some benefits you can experience with usage-based car insurance online:
Safe Driving
When there is a system that records and monitors the driving data of the driver, it enhances the driving habits of the insured and encourages safe driving within the prescribed speed limit.
Lower Premium
Telematics car insurance online is dependent on the usage of the vehicle and thus invites a lower premium.
Encourages Road Safety
A telematics car insurance policy is essential for mitigating road accidents and encouraging road safety.
For Those Who Work from Home
Telematics car insurance plans have been introduced to benefit users who don't use their car on the road much, which ensures better safety and fewer chances of mishaps or loss/damage to the vehicle.
Beneficial for Both- Insurer and Insured
Today, insurance companies can offer curated and customised insurance policies using telematics technology to increase their profits and let customers receive comprehensive coverage. There are fewer chances of vehicle damage, and insurers benefit from live-tracking the vehicle on the road. Policyholders who don't use the vehicle much benefit from a compact and comprehensive car insurance online plan that also encourages them to drive safely because of the monitoring.
Roadside and Vehicle-based Benefits
Telematics can find abandoned vehicles, make drivers more secure, and save fuel and repair costs. Telematics car insurance helps segregate consumers based on individual risk assessment. It helps in estimating the damage caused due to an accident and minimising fraud. If the driver exceeds the speed limit, the driver can be warned. Further, in case of a collision on the road, the driver can call for roadside assistance via telematics software.
Different Types of Usage-Based or Telematics Car Insurance Plans
You can apply for various kinds of telematics car insurance online, and the premium depends on the plan you choose:
- Pay As You Go (PAYG) – Under this category, you pay according to consumption and is a combination of the above.
- Distance Telematics Insurance – This kind of car insurance online depends on the mileage covered, or the distance travelled by your car during the policy tenure.
- Pay As You Drive (PAYD) - The premium is calculated based on the number of trips.
- Pay How You Drive (PHYD) - The premium is calculated based on the skills of the insured, such as accelerating, braking, etc.
Conclusion
Car insurance online premiums depend on various factors like the make and model of your vehicle, age, lifestyle, medical history of the insured, and even usage. The pandemic has resulted in the creation of a practical car insurance plan that depends on how the vehicle has been used. With telematics car insurance, you can estimate car insurance premiums based on real-time data such as distance travelled, driving behaviour, and vehicle usage. If you drive safely, you can even reduce your premium. Telematics-based insurance benefits many stakeholders such as car manufacturers, RTAs and workshops. Telematics technology, therefore, has a very broad reach and many benefits.
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