The concept of telematics insurance with pilot testing started in the year 2014, with insurance officials saying that the launch may take time because of the concern of security, but finally it has been launched and entered into the Indian insurance domain. Bajaj Allianz is the first company to launch the telematics auto insurance in India.
It is a totally new concept for the Indian market and most of the people are still not aware about it, so through this blog, we will try to understand the concept and scope of telematics auto insurance.
What is Telematics Car Insurance?
Telematics car insurance is another version of a motor insurance, which works on the concept of pay-per-use in which the premium is decided or discount on premium is provided on the basis of driving habits like the speed of a car, distance covered, types of the road being used. Such data about your driving pattern is collected through a GPS enabled device known as a black box which fits into your car to assess your driving. Based on the good driving habits, the premium will be charged, or discount will be provided by the insurer. The price of this device has fallen sharply from Rs.4, 000 to Rs 2,000. But customers need not have to worry about the price of these black boxes as it being provided free by the insurer.
What is the Global Scenario for Telematics Auto Insurance?
While it is a totally new concept in India, countries like the United Kingdom, Italy and US are leading the markets with rapid growth in telematics auto insurance.
In Europe only, by the end of 2014, there were 4.8 million telematics insured polices which is expected to grow at the rate of 42.4% and result in 28 million users by the end of 2019, with Italy being the leader in the adoption of telematics auto insurance with a penetration rate of 4%. While in North America, it is expected that, there will be 32.5 million users by the end of 2019 with an annual growth rate of over 50%.
On a worldwide basis, number of telematics equipped users is 89 million. You can understand the importance and benefits of telematics insurance from the worldwide scenario and how rapidly it is growing.
What is the Scope of Maiden Telematics Auto Insurance Plan in India?
Bajaj Allianz General Insurance Co. is the maiden company to launch a product in the category of Telematics Auto Insurance. It is offering telematics auto insurance for cars only under its “Drive Smart” offering. A customer can go for this option of Drive Smart while buying or renewing the motor insurance policy with Bajaj Allianz General Insurance Co.
Under its Drive Smart offering, you will be given a USB device which can be easily fitted to your car. You will be provided with a Drive Smart policy number which you will have to enter into the insurance wallet app on your mobile or on the customer portal (after log in) and then click on Drive Smart option. Under Drive Smart section, you will have to enter device id from Drive Smart device. Then you can insert the device into the OBD port of your car and it will be ready to use.
The DriveSmart device in your car will provide you with the following information: –
- Real-time driving feedback is provided on mobile phones with the help of an application.
- Emergency roadside assistance
- Over speeding alert
- Geo Fencing alert
- License/Insurance/PUC expiry reminder
- Servicing reminder
- Engine/Battery status indicator
Initially, motor insurance premiums are fixed on an annual basis under this scheme of insurance and later the discounts will be offered only after data is collected over a 12-month period.
The facility of Drive Smart is not available for two wheelers and it is only applicable for cars which have an OBD II port.
Is it Related to Premiums Only?
The function of telematics auto insurance is not only to provide discounts on your premium, but it also offers a safe, secure and economical way of driving, along with other allied benefits. The installation of this device can make you a better and safe driver by inculcating a safe driving behavior along with the financial reward on your motor insurance policy. It will help you to assess, alter or modify your driving habits for good.
It is a welcoming move in the motor insurance segment of India with the launch of the Telematics auto insurance policy. Telematics auto insurance is a way of rewarding good driving behavior with low premiums which in return will assure safety and security of customer and their family members. With the launch of Telematics insurance, pay per use concept of motor insurance is going to grow and at the same time, the insured person will have a safe and secure way of driving. While safety and security are the major concern, cost effectiveness on the right kind of driving will be an add-on benefit for telematics insured people.