The IRDAI has set up a working group to look into allowing modifications of the motor insurance product structure.
Not only is the insurance regulator looking to allow short-term duration products, but it may also permit technology-led solutions for dynamic pricing and better services, reports Moneycontrol.
Trial-based technology products could be allowed. Telematics or tracking devices will be a key component of the policy.
In motor own damage insurance, insurers suffer from the inability to launch innovative product features or tweak the policy duration. Any additional cover requires the insured to purchase 'add-ons' by paying more premium. These include engine protection, no-claim bonus, roadside assistance as well as zero depreciation cover. Other markets have these as a part of the core policy.
Similarly, co-ownership of cars is being considered globally. Once this is operational, multiple parties could be responsible for the car's insurance. How this will work out in the Indian market will be crucial, considering that vehicle theft rates are high in the country.