User Based Insurance Or Pay As You Drive

The insurance sphere has always been high on innovation and lateral thinking. After all, insurance (especially in third world and developing countries, like India) isn’t considered an absolute necessity, thus, insurers must constantly evolve their product to attract the right attention. In the same vein, the concept of ‘Usage Based Insurance’ is gaining prominence in the sphere of car insurance. What exactly is this concept? And how relevant is it to car owners in India? Read on…

Basics first, what is Usage Based Insurance?

As the name suggests, Usage Based Insurance is all about calculating the applicable insurance premium depending on the vehicle owner’s driving habits. It’s essentially the ‘Pay As You Drive’ model, wherein your usage of the vehicle decides the quantum of insurance premium payable. Expounding,

  1. The vehicle’s odometer reading is the primary decider of the applicable coverage.
  2. Coverage is also dependent on the location based data- as gleaned from GPS, Smartphone App and/or any authorized tracking device installed on your car that provides real time information on the overall car usage minutes.
  3. Other information collected from the car, including vehicle’s average speed, distance travelled, time taken per trip, etc., also contributes towards the vehicle’s coverage.

How does this ‘spying’ impact my car insurance profile?

Usage Based Insurance, and the methods used to make it happen, can be deemed as ‘good spying’, where the data collected isn’t utilized in any marketing stunt, but rather, to evaluate your abilities as a driver. If you are a disciplined driver, your premium amounts are bound to be less. Hence, you will be solely responsible to assign your own premium amounts, without having to comply with a common rule that applies to a larger demographic. Stop paying for the irresponsible mistakes of others!

What is the role of ‘Telematics’ in this insurance format?

Broadly speaking, Telematics refers to the whole range of technologies and implements that send, receive and store information to and from any moving vehicle. A simple GPS device, a plug-and-play device for your dashboard, or maybe a tracking app on your smartphone, any of these implements is central to the concept of telematics usage based insurance.

This sounds expensive. Is it really gonna be cost effective compared to the traditional option?

This Usage Based Insurance concept rewards responsible driving. Definitely, disciplined drivers are in line to save a bundle of money. And, the traditional option is equally hard on irresponsible drivers, while not rewarding the good guys for their fine work. You do the maths!

Sounds exciting. When can I expect to see ‘Pay As You Drive’ option as a common offering?

Before Usage Based Insurance becomes as common as bread, the car insurance companies need to sort out three fundamental concerns-

  1. Turning the concept into a lucrative option, with long term advantages for the customer and definite benefits when viewed against the incurred costs.
  2. Creation of a comprehensive plan to deal with all the sensitive data generated- its storage, security etc.
  3. Quench all the concerns that are likely to arise amongst the customers about their privacy.

Usage Based Insurance is an inevitable reality, and competition amongst Car Insurance providers is bound to heat up when this advantageous option becomes common knowledge amongst the Indian customer base. Telematics is the next big thing, definitely.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

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Usage Based Insurance Reviews

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  • Oriental Insurance Car Insurance
    "You can go for it but make sure about the clarity"
    0.5 1.0/5 "Really Bad"
    Earlier i was having a car insurance from Oriental. When i contact the customer care service, they are not giving guidance regarding the ownership change. They are not providing good service hence i have cancelled the car insurance with them since i do not want to continue.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2019
  • Shriram
    Shriram Car Insurance
    "Easy Process"
    0.5 5.0/5 "Blown Away!"
    I'm not facing any problem with Shriram General Insurance. I didn't contact the customer care service till now. I bought the car insurance from Shriram because i felt the premium is little cheaper than others. They are providing the IDV value of Rs. 1.5 lakhs. They have not provided me a claim bonus.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2019
  • New India Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    Till now i didn't talk with the New India customer care service. One time there was a fraction happen for my car that time made the claim and they took 1 week to give the claim. I've paid the premium amount of Rs. 15000 approximately. By online only, i used to renew the insurance.
    Was this review helpful? 0
    , kochi
    Reviewed on Dec 13, 2019
  • Bajaj Allianz Car Insurance
    "Policy Coverage & Claim Experience"
    0.5 1.5/5 "Bad"
    I had taken a car insurance with Bajaj Allianz & find the claim experience (originals are requested to be in possession of surveyor via dealer) & policy coverage (surveyor said the damage to my car is probably due to rat/dog which is not covered), due to which i had to eventually pay from my own though i pay hefty auto-premium
    Was this review helpful? 0
    , chennai
    Reviewed on Dec 13, 2019
  • Bajaj Allianz Car Insurance
    "Good friendly policy"
    0.5 4.0/5 "Great!"
    Long back I have done my claim for my car in TATA AIG. I took the car insurance from TATA AIG because we felt the policy is good and i'm comfortable with the company, am a happy customer. i didn't claim fully since its not a bumper to bumper policy.
    Was this review helpful? 2
    , bangalore
    Reviewed on Dec 11, 2019
  • Bajaj Allianz Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    When i purchased the car in the showroom where they have provided a car insurance policy from Bajaj Allianz. I have renewed the policy for the second year also but I have no idea about the premium amount and its a zero depreciation policy. They have informed me about the no claim bonus details. I have not made any claim experience till now.
    Was this review helpful? 1
    , chennai
    Reviewed on Dec 11, 2019
  • Chola Ms Car Insurance
    "Extremely bad."
    0.5 0.5/5 "Unacceptable"
    Extremely bad. Pathetic is the word. They will take you hard earned money in the name of insurance and when you go to claim for it first they will give you the lure of no claim bonus if you dare to claim and even if you insist for claim, Broad day light robbery is the only word to describe this insurance company.
    Was this review helpful? 3
    , ahmedabad
    Reviewed on Dec 05, 2019
  • ICICI Lombard Car Insurance
    "User friendly"
    0.5 5.0/5 "Blown Away!"
    They are very fast claim experience. I have not personally chosen the policy from ICICI Lombard. From the merchant side by default they have provided me a policy from this company. Recently I had applied the claim and I got up to 83%. Earlier it was a bumper to bumper covered policy now my car is more than 5 years old, so its not covered 100% now.
    Was this review helpful? 5
    , bangalore
    Reviewed on Nov 26, 2019
  • review Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    When i done my claim, Kotak mahindra bank Car insurance, they have given me a claim immediately. To reach their customer care, its quite difficult. They do not have any Tamil assistance. Once i given the documents, they have given me a claim through RTGS transaction. When i search in online, kotak mahindra has a less amount of premium. My total car damage amount was Rs. 24000 in that they have given Rs. 16800 which covers upto 70%.
    Was this review helpful? 3
    , tirupur
    Reviewed on Nov 26, 2019
  • New India Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    New India Assurance company is very helpful for customer. Once the agent came to my place and guided me with a full support and he used to contact me whenever the policy gets expired. They used to remind me before on 10 days, then they will come to my place to collect the cheque. I pay the premium amount of Rs. 19,000 by last year and they gave me a no claim bonus as well.
    Was this review helpful? 2
    , tiruchirapalli
    Reviewed on Nov 25, 2019
  • Chola Ms Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I'm having a car insurance from Cholamandalam but the benefits are good but still i haven't claimed anything once i had experience the claim, I will come to know about their real face. The customer care executive has clearly explained me about the policy details.
    Was this review helpful? 1
    , navi mumbai
    Reviewed on Nov 25, 2019
  • review Car Insurance
    "Car insuarnce"
    0.5 0.5/5 "Unacceptable"
    Such a money making company , third class service , i gave my car to insurance get it claimed but i am waiting from past 1 month , i didn't get the approval . I have never came across such a bad vompany and bad customer service and still i am struggling with these people . Shameless company .
    Was this review helpful? 0
    , new delhi
    Reviewed on Nov 24, 2019
  • review Car Insurance
    "It's a fraud company eating customers money"
    0.5 0.5/5 "Unacceptable"
    Bharti axa car Insurance company is not genuine at all as it is a private company so their focus is just to collect the premium from clients but at the time of claims they run from their responsibilities and deny the claims for no reasons.. The company they have hired for forensic and investigation are also working in their favour as those companies are paid by bharti axa for making reports in their favour, I would like to alert the customers to never go with bharti axa car insurance.
    Was this review helpful? 0
    , new delhi
    Reviewed on Nov 20, 2019
  • ICICI Lombard Car Insurance
    "Better Policy"
    0.5 5.0/5 "Blown Away!"
    Taken my car insurance from ICICI Lombard because it has been offered from Maruti Showroom itself and i have paid the premium amount of Rs. 13000. Its a zero depreciation hence its cover for bumper to bumper. They are providing the IDV value of Rs. 4.5 lakhs.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Nov 13, 2019
  • Bajaj Allianz Car Insurance
    "Many network garages in Bajaj Allianz"
    0.5 5.0/5 "Blown Away!"
    I have a car insurance from Bajaj Allianz. They are providing a good no claim bonus and customer service is good so i have switched over from other company to Bajaj Allianz. For the car, i have paid the premium amount of Rs. 12200. Its a first party insurance.
    Was this review helpful? 0
    , mumbai
    Reviewed on Nov 12, 2019
  • Bajaj Allianz Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    I don't have any claim experience even the policy is good. There is no hassles till now. I have been paid the premium amount of Rs. 14000 and i have taken this policy long time back. There is no particular reason for choosing the Bajaj Allianz. Its a zero depreciation policy and they have provided me a coverage amount of Rs. 4.50 lakhs.
    Was this review helpful? 0
    , thane
    Reviewed on Nov 10, 2019
  • ICICI Lombard Car Insurance
    "Okay Policy"
    0.5 5.0/5 "Blown Away!"
    Recently i have a claim experience for my car insurance with ICICI Lombard. I got the ICICI Lombard insurance from the Maruti Showroom when i purchased the car. There was a claim issue when i applied it. They gave less settlement amount and it was a late approval. I had taken the zero depreciation policy.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Nov 09, 2019
  • ICICI Lombard Car Insurance
    "Okay Policy"
    0.5 4.0/5 "Great!"
    My friend is working as a agent in ICICI Lombard thats the reason i have gone with ICICI Lombard. I have paid the premium amount of Rs. 8500 for the satisfied coverage value as per the age of the car. I have not approached for any claim till now. The policy would be renewed by the agent itself.
    Was this review helpful? 0
    , jaipur
    Reviewed on Nov 08, 2019
  • National Insurance Car Insurance
    "Good Claim Experience"
    0.5 5.0/5 "Blown Away!"
    National Car Insurance is Government based policy and I'm using the Maruti car and they are giving a good service since they have a tie up. The price is very less when i compared with other company with the same IDV. I have a claim experience with them and it was satisfactory.
    Was this review helpful? 0
    , nellore
    Reviewed on Nov 07, 2019
  • United India Car Insurance
    "Good Insurance Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance was taken from United India. I have purchased second hand car, so i have been renewing the policy with the same company which car holder was having at earlier. I am paying the premium amount of Rs. 13000 per year. I have not applied for any claim till now.
    Was this review helpful? 1
    , manjeri
    Reviewed on Nov 05, 2019
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