Telematics or Usage Based Car Insurance in India

With technological advancement, the way people purchase insurance has changed. Today, it has become possible for people to buy insurance in just 3 easy steps in less than 2 minutes. The focus is now telematics car insurance which is now gradually picking up in India. With the help of telematics, premium calculation is done. Read on to know all about telematics or usage based car insurance in India.

Telematics is defined as technology that makes use of informatics and telecommunication. The telematics system stores and helps in transmission of the user’s driving related data.

The three main components include:

• Telematics Control Unit

  This unit consists of a GPS that tracks the location of the vehicle. The control unit also helps in storing information about the vehicle such as its speed, fuel consumption, braking, faults, etc

• Cloud server

  Using a wireless or cellular network, the data collected in the telematics unit is transmitted to a cloud server. The data is stored in the form of packets

• Mobile Interface

  The cloud server transmits the data to a mobile interface through a web server. Information from the vehicle is stored and transmitted through a wireless network to a master database

The telematics system can be implemented with the use of different technologies including:

• OBD based: A small electronic device is installed in the vehicle which stores the information through a wireless network and transmits it to a master database
• App based: The app is used with the phone’s GPS and telematics that help in fetching the data
• Blackbox-based: This refers to an electronic device mounted in the vehicle to store the data related to the trip. This is a high cost installation compared to other devices

Usage based car insurance in India

Last year in 2022, IRDA permitted usage based car insurance that permits usage of pay as you drive and pay how you drive insurance cover.

Usage based car insurance in India is a boon helping insurance companies create personalized insurance offers. Given below is how telematics car insurance can benefit drivers.

• Driving data can make the driver aware of his or her driving habits
• It ensures safe driving, encouraging people to drive cautiously and follow the speed limit
• People with good driving skills will be able to save premium
• Vehicle owners who do not use their vehicle will pay less premium

• Pay as you drive: Premium is charged based on the amount of driving done
• Pay as you go: This model requires installation of a telematics device
• Pay how you drive: The premium is charged based on the driving skills such as braking, acceleration, etc.
• Distance based insurance: This is nothing but the number of miles covered during the policy period.

• Contact the insurance company within 48 hours of the accident or theft
• File an FIR in case of third party damage or theft of the bike
• Submit the required documents
• The insurance company will appoint a surveyor to check on the extent of damages
• The car will be sent to the garage for repair
• Cashless service will be provided in case the car is being repaired at a network garage
• In case of theft, insured declared value will be given to the policyholder after the police shares non traceable report