Telematics devices that can be installed in cars has seen a drop in prices. This means insurance customers who opt to get such a device installed would get it for as little as Rs 1,800-2,000, compared with the Rs 4,000-5,000 earlier. These devices would enable insurers to get additional data on vehicle usage and offer better pricing. Telematics is a concept that was introduced to understand the usage of the car, including the speed at which it is being driven and the distance that is covered on a daily or periodic basis. Based on the data that is collected, insurers can decide the risk profile of the customer and also tweak the motor insurance premium accordingly. Roopam Asthana, chief executive officer, Liberty Videocon General Insurance, said costs have come down and it is only a matter of time before there is full-fledged adoption of this technology in India. “We have tied up with vendors to offer it to customers, though uptick is still not very high. But in western countries, where the premium for younger drivers is higher, they have actively purchased these devices to reduce premiums,” he said. Telematics car insurance contains a black box.
This is GPS-enabled and can get data on the usage. It also helps in tracking a vehicle, if it is stolen since it has satellite-based location services. Asthana added even mobile-based telematics has come in, where one need not even install a device in a car; a mobile application will suffice. These could be beneficial for self-driven vehicles since the mobile device will act as the GPS device. Here, after using telematics, motor insurance premium is calculated depending on the data gathered. There could also be an online dashboard-like platform where driving behaviour is updated, which can be reviewed by the owners and drivers. While this device-based insurance was launched in western markets more than a decade ago, other markets in Asia have also quickly adopted it. In some regions, these devices are soon to become mandatory and industry experts say in the next 10 years, that would be the case in India too. It is anticipated that while these would come pre-installed in cars, there could be an opt-out feature for those who do not want their cars to be tracked.
Indian insurance companies like Liberty Videocon and ICICI Lombard are already doing pilots in this field where devices are installed in those vehicles where owners give permission. With prices going steeply down, the number of users even at a pilot stage are expected to a significant jump.
What is telematics auto insurance:-
* Telematics auto insurance involves a black-box being fitted into the cars
* These boxes are GPS-enabled and can track the vehicle
* Priced at Rs 1800-2000, they can be pre-installed or put in later
* Cost of these devices has fallen sharply in India
* Based on data collected on usage of car and information including average distance travelled, speed, an insurer is able to offer discounts
* Those with lower risks associated with their vehicles thus get advantage of lower premium * In Western countries, young drivers are the most prolific users of these devices since they are otherwise required to pay higher price for insurance