New Delhi: A committee on auto insurance set up by the Insurance Regulatory and Development Authority (IRDA) has suggested that motor insurance premium in future may be determined through telematics, as per Zee Media sources.
Telematics Insurance works by fitting a vehicle with a small device commonly known as a black box that records speed patterns and distance travelled. It also records data about the type of road/s the driver is driving on and when (whether night or day or during the weekend) and how long he has been driving.
The telematics will be used to monitor driving habits, vehicle usage and even distances covered, to ascertain the insurance premium of cars. Telematics makes integrated use of telecommunications and IT for vehicles. It is used for real-time navigation, roadside assistance, and vehicle tracking.
At present, motor insurance in India is being priced based on parameters like the make and model of the vehicle, its capacity, and the geographical use.
Other than its popular name as Black Box Insurance, Telematics insurance is also commonly known as GPS Car Insurance, Smart Box Insurance, Pay-as-you- Drive-Insurance and Usage Based Insurance.
The technology was introduced in the UK and USA in the year 2000. The device will be fitted inside the car to check all the parameters and at the end of the month, the insurance premium will be calculated based on the observation of the device. It will cost nearly Rs 2000 for the retro-fitting of the device.