All you need to know about driver-based Motor Insurance

Motor Insurance

The insurance segment is undergoing a revolution as new and innovative insurance products are being offered by insurance companies. The Insurance Regulatory and Development Authority of India (IRDAI) has also established a project called Sandbox which allows insurance companies to test innovative products in the market before offering such products as full-fledged insurance plans. This project has seen several new initiatives by insurance companies. One such initiative, which is being offered in the car insurance segment, is the driver-based pay-as-you-use car insurance policy by Edelweiss. Let’s understand what the policy is all about –

What is driver-based motor insurance policy?

Edelweiss launched SWITCH, the first driver-based own damage cover for private vehicles. The policy provides floater coverage for cars and bikes under the same plan. The premium depends on the age and driving history of the user and is, therefore, dynamic. Here are some of the salient features of the policy –

  • The policy covers up to three vehicles under a single plan. These vehicles can be cars or bikes
  • Coverage is offered only for the damages suffered by the vehicle. This is, therefore, a standalone own damage motor insurance plan
  • The policy is an app-based plan. This means that it is controlled and operated through a mobile application which should be downloaded on your Smartphone
  • This is a pay-as-you-use policy. You can turn the coverage on or off based on your usage. If you are using the insured vehicle, you just have to switch on the coverage from the application and if you are not using the insured vehicles, the coverage can be turned off.
  • Since coverage is usage based, the premiums are lowered
  • The vehicles to be insured can be changed during the policy tenure
  • You can add multiple drivers to the policy and the premium would be calculated considering the drivers added, their age and driving experience 

How is the policy different from a normal motor insurance plan?

While normal motor insurance plans cover only one type of vehicle, this plan covers multiple vehicles under the same policy. Moreover, the plan is very flexible in the context that the vehicles to be covered can be added or removed and you have to pay the premium only for the days that you use the vehicle. Moreover, under the driver-based insurance plan, the premium is calculated based on the age and driving experience of the driver. This consideration is not applicable in normal motor insurance policies and this makes this policy unique.

What is covered under the plan?

The driver-based motor insurance policy covers damages suffered by the insured vehicle (s) in the following contingencies –

  • Accidental damage suffered only when the vehicle is in use 
  • Loss or theft of the vehicle whether in use or not
  • Damages suffered due to fire or explosion whether the vehicle is in use or not
  • Damage due to natural disasters like floods, hurricanes, cyclones, earthquakes, lightning, landslide, subsidence, etc. whether the vehicle is in use or not
  • Damage due to terrorist activities whether the vehicle is in use or not
  • Damages suffered due to riots, strike and any other malicious act
  • Damages suffered when the vehicle was being transported through rail, road, air or sea

    Coverage is allowed for the cost of taking the vehicle to the nearest preferred garage, getting it repaired and then delivering it at your doorstep.

Roadside assistance coverage is also allowed under the plan which covers mechanical and electrical breakdowns, immobilization due to an accident, flat tyre, dead battery, keys being locked inside the vehicle, empty fuel, contamination of fuel, local travel if you are on a tour, continuation of journey after the breakdown, cost of overnight accommodation, repatriation of the vehicle, medical coordination and urgent message relay.

What is not covered?

Coverage is not allowed in the following instances –

  • Damage suffered by a vehicle which is not added to coverage through the mobile application 
  • Damages suffered when driving without a valid license or under the influence of alcohol
  • Damage suffered if the vehicle was being used by a driver who is not added in the policy document through the mobile application
  • Depreciation and wear and tear of the insured vehicle due to usage
  • Loss or theft of the vehicle if the keys are left inside the vehicle itself or when the anti-theft mechanism of the vehicle was not working properly

How does the driver-based motor insurance plan work?

After you buy the policy, you have to install the company’s mobile application on your Smartphone. The policy would be controlled using the application that you install. You would, then, have to register on the application and provide the details of the vehicles being insured and the drivers who would be using the vehicle. Based on these details and the details of the vehicle, the premium would be computed. The premium would be divided into two components – a lump sum amount which would be payable at the outset and then the remaining premium would have to be paid as per your chosen payment frequency. 

Though the company collects the premium in advance, the actual premium would depend on your usage. You would have to turn on the coverage when you use the vehicle and then turn off the coverage if the vehicle would not be in use. Thereafter, based on your usage, any unused premium would be carried forward to the next year.

In case of claim, you can register your claim through the application itself and your claim would be settled by the company.

Benefits of driver-based motor insurance plan

This unique motor insurance plan launched by Edelweiss has many benefits for vehicle owners. These benefits are as follows –

  • The policy allows them to buy a single cover for up to three vehicles at one go. This is suitable for those who have multiple vehicles. They don’t have to buy separate motor insurance policy for each vehicle that they own
  • Since the coverage is usage-based, there is a huge savings in premiums especially for those individuals who use their vehicles sparingly
  • The policy provides a comprehensive scope of coverage with the roadside assistance add-on inbuilt within the scope of coverage of the plan. Thus, you get covered right from the time the vehicle is taken to the garage till the time that it is dropped off at your residence
  • Making claims under the policy is easy as the mobile application allows you to make a claim through pictures and videos in real time
  • It is easy to add or delete vehicle and drivers during the policy tenure
  • This is the first policy wherein the driver’s age and driving experience in considered in determining the premium amount. This, therefore, allows experienced and safe drivers to save on the premium cost.

The insurance segment is changing and with products like this customers can benefit from reduced premiums on their insurance policies. Moreover, since the plan is dynamic, it can be changed to suit the coverage requirements of individuals who have multiple vehicles. So, understand what this driver-based motor insurance plan is all about and then buy the policy if it suits your needs.

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