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Old 29th September 2009, 12:09   #1
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Default Insurance : Safe Drive parameter to reduce premium costs.

There is a news report in Business Line today that Insurance companies are looking to factor in the safe driving parameter in deciding the premium rates for each policy. To start with ICICI Lombard on getting approval from the regulator plans to install a gadget in the insured vehicle to monitor -
- Speeds at which the vehicle is driven, specifically to know if driven above 60 kmph
- whether the car is driven outside the zone where car is insured.
- if the car is driven after 10 p.m.

They say it would be a pilot initiative to give some benefit to safe drivers ( as per their definition of safe driving ).
The cost of the gadget is around Rs. 10.000 previously and now it is around Rs. 5000. Not known whether the cost is supposed to be passed onto the insured.


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Old 29th September 2009, 12:27   #2
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( as per their definition of safe driving ).
Hit the nail on the head here. Driving above 60 or at night or far away from your home isn't unsafe. Its a bit of a misnomer to call that safe driving. Frankly, I'd rather pay extra and have a good time with the car (like going on long driving holidays or a quick spin at night when the roads are empty) than save a tiny bit and end up not using the car like you want to.
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Old 29th September 2009, 12:50   #3
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What about privacy ? i for one will never agree to install any device in my car which can tell others about location.
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Old 29th September 2009, 16:49   #4
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On a lighter note,just like taxi meters, there will be a way out to cheat these devices and remain in the 'safe driving parameters' all the while.
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Old 29th September 2009, 17:02   #5
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Boys - George Orwell had it absolutely right when he wrote 1984.
"Big Brother is Watching YOU!"

I for one would certainly oppose any such device in my car. And what is 60Kmph on good highways like BLR-MYSORE NICE road or Bombay-Pune Expressway or DND or whatever? Given the vehicle's capabilities this should be set at a more realistic 100-120kmph on highways and possibly 20-40-60 range in city depending on the time of day.
In any case in Bangalore between say 745am and 9pm on weekdays and weekends one can really count one's self lucky if one exceeds the average speed of 20kmph! (as per the newspaper report of a few days ago on the average speed attained by vehicles in Bangalore!)
For example early mornings - 5.15-5.30 am or so on weekends- on my way to the golf club, on the inner ring road I regularly touch 80-100 in my Scorpio without a problem - since anyway there are very few vehicles on the road at that time. But I never jump traffic lights and break other rules or indulge in any other misdemeanour.

Why should one be penalized for driving fast when the roads are empty?

What about other aspects like Safety, seat belts, knowledge of and adherence to road rules. Driving history, age, experience etc?

As far as I know the international norms for deciding insurance premia are a sort of aggregate of various parameters all of which come together in some sort of weighted average formula. age experience type of car, colour of car, where it is parked and several other things play a role in this - here this sounds like the typical arbitrary kind of decision making that our chaps so love doing!

Last edited by shankar.balan : 29th September 2009 at 17:05.
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Old 29th September 2009, 17:06   #6
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well, one may be a "safe driver" driving around 50-60 kmph on a road where a sensible speed would be not more than 30 kmph??how is that piece of equipment going to monitor that? most of our roads have an average of not more than 20-30 kmph.most cabs do have speed governors and mere instalation of the same hasent brought down the accident rate or deter the cabbies from rash driving.
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Old 29th September 2009, 17:11   #7
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Originally Posted by emkay456 View Post
The cost of the gadget is around Rs. 10.000 previously and now it is around Rs. 5000. Not known whether the cost is supposed to be passed onto the insured.
If its going to be gadgets, then there will be enough "workarounds" which our local mechanic will find. If taxi meters are altered, wonder about insurance gadget !!
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Old 29th September 2009, 19:49   #8
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There's a word for ideas like there. Umm, what is it? Yeah, got it = RUBBISH.

The insurance companies would be better off maintaining a centralised database of accident history + driver records. Simply put, the lesser accidents that you've had, the lower your insurance premiums. Only logical isn't it?
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Old 29th September 2009, 20:05   #9
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shankar & brat, totally agree with you. I don't think these companies have access to the speed limits of the areas the cars are being driven. Unless that data is available, having an Uniform Speed for all Zones is just plain stupid in my opinion. Even if it's in the City, do they expect someone to just crawl even when the entire road is empty ? How are they going to ascertain what is 'safe' ? What maybe 'safe' to them, maybe too much for us.
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Old 29th September 2009, 20:16   #10
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Originally Posted by GTO View Post
The insurance companies would be better off maintaining a centralised database of accident history + driver records. Simply put, the lesser accidents that you've had, the lower your insurance premiums. Only logical isn't it?
Yeah precisely. Or more correctly, the number of times you use your insurance for repair dictates your premium. Simple and easy and its actually something like the no claim bonus which we already see.
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Old 29th September 2009, 20:22   #11
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I was also offered a gadget similar to this when I was in US which would have lowered by insurance premium by a certan amount ( I do not remember exactly by how much now). I flatly refused. I do not mind paying a little bit extra for privacy.
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Old 30th September 2009, 03:49   #12
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Quote:
Originally Posted by GTO View Post
There's a word for ideas like there. Umm, what is it? Yeah, got it = RUBBISH.

The insurance companies would be better off maintaining a centralised database of accident history + driver records. Simply put, the lesser accidents that you've had, the lower your insurance premiums. Only logical isn't it?
Totally agree with you, In fact the insurance policy should be for drivers not vehicles, so that you can appreciate the good drivers by reducing their premium, and punish the one who doesn't bother to follow the rules/causing accidents.
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Old 30th September 2009, 06:26   #13
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Here's my perspective. A few companies in US are also toying with this idea. The companies do not intend to have this installed on all cars.

Where it makes sense
Think about a situation where clearly your wife or mom has a car to themselves - coz you drive your toys like the big boys. They are pretty much driving only within city limits, relatively short(er) distances and under the speed limit (whatever that may be). Now if given an option to save 25-40% insurance there per year for safe driving habits, wouldn't it be worth it.

In fact, back in the US, it has long been a grouse that why safe drivers pay almost similar insurance premiums as the big boys who have not had a violation yet. Smaller fraction of the society - but with a saturated US insurance market, anything to gain a customer. The insurance company atleast in the US do not intend to make this default on all insured cars as the equipment upfront and recurring costs are high.

Now why introduce that in India
- Is the auto insurance market saturated: No. Going by the increasing auto sales every month, certainly not.
- Do many families have second/third vehicle dedicated to wives/mothers/other safe drivers: Yes in the urban sector. Not sure about the rural.
- If there is only one vehicle in the rural family in a village in Kutch, is the driving pattern still within the definations of "safe driver"? Perhaps yes.

While there are other parameters and this can be debated, there is a market for this. The insurance companies need to tap the right customer and not go after enthusiasts on this forum.
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