To assess the risk of insuring a specific driver, telematics insurance uses technology to monitor and analyse driving behaviours like speed, braking, distance, and other driving patterns. Telematics insurance has yet to become very well-liked among car owners in India despite its potential advantages, such as increased safety, lower car insurance online premiums, and more individualised coverage. Let’s examine some of the causes of this in more detail.
- No-Fault Regime: In India, the vehicle is insured, unlike in other nations where the insured is the person operating the vehicle. The Indian Motor Vehicles Act of 1988 also considers no-fault liability car insurance claims, which require compensation for accidents caused by negligence to follow a predetermined structure. This indicates that the emphasis on individual driving behaviour, a crucial element of telematics-led insurance plans, must be minimal or nonexistent.
- Multiple Drivers: A car is more commonly used as a family vehicle in India, so people with different driving styles may operate the same vehicle. As part of the telematics setup, it is challenging to accurately interpret and attribute different behaviour patterns on the same car for insurance considerations. When calculating insurance premiums and accurately assessing risk, this can present issues.
- Privacy Concerns: Some car owners are concerned about privacy because telematics insurance involves collecting and analysing personal data. There is still a perception that telematics technology is intrusive and opaque even though data privacy laws are in place to protect people. Due to this, car owners may need more time to give insurers access to their driving information. Some people may find it unappealing that their insurer can see their driving behaviours, travel routes, and destinations.
- No Clear Tangible Benefit To Policyholder: Telematics insurance’s potential for lowering premiums must be fully realised due to inconsistencies in how insurers interpret and use telematics data. With a standardised approach, policyholders may see a clear benefit. Establishing a tangible benefit at an industry level, akin to the no-claim bonus (NCB), is essential for telematics insurance to succeed in India. A standardised benefit would ensure that telematics insurance advantages are accessible across the motor insurance *
- Accuracy In Data Interpretation: India has a wide range of driving and road conditions. Hard braking on a highway is an incident that can be easily attributed to driver behaviour. Still, it could also result from an animal suddenly darting across the road. More than telematics is required to distinguish between events and tag them accurately. Additionally, the complexity of driving patterns brought on by multiple drivers may make it more challenging to analyse and draw conclusions from telematics data alone.
Telematics insurance needs several adjustments to become more popular, such as incorporating sensors and cameras, ensuring cost-effectiveness, addressing data privacy concerns, and improving data interpretation accuracy. While it can potentially transform the car insurance online market, there’s still work before Indian car owners widely accept it. As technology advances, telematics insurance is expected to play a more significant role in ensuring driver safety. It is ideal to carry out the car insurance renewal on time to get uninterrupted coverage.
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