[Rajeevraj]

Bajaj Allianz, for the first time in India, has launched usage based insurance packages called 'Drive Smart'. This is based on the concept of Telematics ( the technology of long-distance transmission of information). This concept is common in several other countries, but as per the report, being formally launched for the first time in India.

Key points

• Data collected via OBD device connected to the car's OBD port. Available free during buying or renewing policy.
  
• The OBD device gathers and transmits data on the usage and other 'quality of driving' parameters.
  
• This data is used along with the other standard parameters (Make, Model, Year, Location) to price the policy during renewal
  
• Device works on all cars manufactured post 2010. Transmits data to an App on the smartphone from where it can be transmitted to the company.
  
• Bunch of other features enabled through the App.(Details below)
  
• Said to recognize patterns like sudden acceleration and braking among other parameters. FAQ's on website indicate that there can be up to 30% reduction in premium based on the data collected.

"There are many car owners who use their car very sparingly and are very careful drivers who end up subsidizing others. Telematics will help us price insurance according to the risk," said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.

Vijay Kumar, president (motor insurance) at Bajaj Allianz, said, "The device will work on every car that has been manufactured after 2010 as all vehicles since then are OBD2-compliant." The Bharat Stage IV norms, which prescribe standards for car emissions, also include a mandate on on-board diagnostics.

Additional Info from the Bajaj Allianz website.

Detailed FAQ's here

Q4. Does Drivesmart insurance policy offer any benefits for good driving behaviour?
Yes, you can save upto 30% on the renewal premium on the basis of your good driving behavior during the year.

Related threads around this topic.

• Experience with Usage Based Insurance in the US. (My tryst with Usage Based Insurance - Progressive's telematics device, Snapshot)
• HDFC Ergo wants to install a logging device. (HDFC Ergo Insurance wants to install a travel logging device in my car!)
• Will usage based insurance work in India

Source: ET Auto

[The Rationalist]

What if someone removes the device intermittently? Is there any way for the insurance company to know? If not,one can remove the device and clock lesser kilometres and get a lower premium!

[13thpsycho]

This is interesting. Don't you think that enthusiastic driving would attract higher premiums. Also I am assuming if we are in b2b traffic all the time then chances of getting a dent or damage increases. That would also attract higher premium. What do you think?

[navtiwari]

Originally Posted by Rajeevraj

[*]Device works on all cars manufactured post 2010. Transmits data to an App on the smartphone from where it can be transmitted to the company.

This does not look right. These devices work on telematics and mobile technology, data from the device is transmitted to the company from where it is made available to the app on smartphone.

Originally Posted by The Rationalist

What if someone removes the device intermittently? Is there any way for the insurance company to know? If not,one can remove the device and clock lesser kilometres and get a lower premium!

I have used progressive snapshot device in US, it collects your vehicle identification number and triggers an email to you if it comes unplugged. Bajaj Allianz should have similar technology.

Originally Posted by 13thpsycho

This is interesting. Don't you think that enthusiastic driving would attract higher premiums. Also I am assuming if we are in b2b traffic all the time then chances of getting a dent or damage increases. That would also attract higher premium. What do you think?

In the US insurance providers do not raise the premium no what matter what your driving pattern. This is to promote safe driving and give you a chance to lower your premium if you show safe driving behaviour.
B2b traffic or open highway does not count but if you accelerate or brake hard it will get counted towards your score. Also, how much(km/miles) and when you drive is also scored. Between 12am-4am is considered high risk, morning/evening rush hour is medium risk and everything else is low risk.

PS: My premium dropped 14% when I used the device.

[SchumiFan]

About time it came here. Used Progressive and State Farm's devices. It even tells the speeds clocked during each run.

It made me relax and not do the 'mad rush to the next signal' thingy. Took it easy on the brakes and acceleration. Got a good discount as well.

State Farm's device even did a bit of diagnostics. But never really relied on it for my car's maintenance. Also had an emergency caller feature as well, if I remember it right.

[swiftnfurious]

Originally Posted by 13thpsycho

... Also I am assuming if we are in b2b traffic all the time then chances of getting a dent or damage increases. That would also attract higher premium. What do you think?

A dent wouldn't be recognized by the device right? So, the chances of higher premium is lower.

In B2B traffic, a person who drives smooth, will have a less probability of damage because of below 2 reasons

1. A smooth movement will ensure the vehicle behind also to move in a similar fashion. Its when you abruptly brake, the probability is high for the guy behind to rear end you.

2. If the movement is smooth, then the impact (in the event of rear -ending) is also less, leading to minimal damage.

[SmartCat]

I don't think sudden braking or acceleration makes much difference to premium, as much as driving at 120 to 140 kmph. There is a direct link between overspeeding and accidents. I haven't heard about any research report linking acceleration/braking to accidents.

One more reason why you will have lower premiums is that the car is tracked by GPS. If it is stolen, it is likely to be recovered. One less risk factor for the insurance company means premiums will be lower.

[tilt]

Oh, I see a few problems with this. I am quite concerned that this will become mandatory. Slippery slope and everything.

1. Anything introduced by any corporate entity that is touted as beneficial to the customer is anything but. It is always only beneficial to the corporation and never to the customer.

2. Premiums may not necessarily reduce. I mean, they will give discounts the first couple of years or something to establish a certain amount of trust, then bam, increase premiums for everyone, and increase it in an exorbitant manner for those who do not have the trackers installed. Et voila, more profit!

3. Location tracking - the insurance company - and anyone they sell all that lovely lovely fat data to - will know exactly where all we went, and when. Advertisers love such data. And so do hackers. Yes the corporations will go Blue in the face saying they have 8192-byte has security and httpssssss:// and SSSSSSL etc., but how many such companies have we heard about, even recently, who announced that they have been hacked and their user data has been compromised? And how many of those very companies promised us that they were the most secure in the world?

4. People who might wish to keep their location history private - maybe due to what society might consider unacceptable, or maybe due to some sensitive medical issues that will come to light if their locations are tracked etc. - will not longer have that freedom available to them. Privacy out the window.

5. Advertisements. Your location data and everything else will be sold to anyone who is willing to pay for it. Then, hooked up with Android Play or Apple CarPlay or anything else, your contacts and their addresses will be correlated with your location and therefore possible purchases history etc (remember, your ICE will be connected to your phone and therefore Facebook/Whatsapp/Twitter and everything you are on) and ads will be served on your ICE based on your location. Driving by a restaurant? Your ICE or your phone could show ads with offers from that restaurant.

6. Your data will be shared with the government, police, and anyone who wants it, either with a warrant or by means of political coercion. You say you don't care because you never do anything wrong? Think again. You have already broken a few laws today without even being aware of it. And legally, you can be prosecuted and penalised for it.

7. The insurance companies themselves will start tracking when and how hard you accelerate, brake, how often, how fast you normally drive, how often do you exceed posted speed limits (remember, driving 35 in a 30 zone is also speeding - for those of you who consider anyone who speeds as being unsafe). And then they will start imposing penalties in the form of increased premiums for all these "infractions". Remember, the insurance company is not here to be your friend or to do good to you - they are only here to extract as much money from you and get any excuse to deny payment to you. And this device makes you bend over with your pants down and put out a neon sign inviting them to have their way with you while you're smiling thinking you'll pay a reduced premium.

8. Like the proverbial frog in the boiling water, you will live happily with zero privacy and the illusion of increased security or discounts.

9. And that, finally, will result in people OT having this device either being denied any insurance at all (because more and more people opt for this device), and such "non-compliant" people all be labelled criminals (such as those not having insurance at all) etc.

If you look at the history of car insurance, it was the insurance companies that lobbied the governments hard to make it unlawful to NOT have insurance, thereby relieving themselves completely of any marketing effort. The governments and police do their marketing for them, and they just sit back and reap the profits.

Remember my first point - corporations are never your friend, they are always in it only for themselves and their bottom-lines. You are just pawns, data. You are not the customer, you are the product.

Cheers

[aravind.anand]

Bajaj Allianz I shall never trust, as they cheated me with NCB for 3 years continuously, before I realized and moved away from them
So with such a complex policy, it would be all the more easier for them to cheat customers. I am certainly not taking this, and not recommending it to people I care about either.

[amitahirrao]

This is the future of Automotive insurance. As more companies coming up with OBD devices connected to cloud, the more organised will be auto insurance sector. The data is directly accessible to insurance company and hence more premium you have to pay if you are a rash driver. Reliance Car connect, Mahindra DigiSense, CARIQ, Carnot are few to name. There are many other players in OBD devices trying to develop an algorithm to read the data from OBD and then present it as different types of information to car users. Now, there is a serious question on their credibility. Insurance companies might control these devices manufactures in long run and then its a problem for the car/ owner who is getting insured.

[carmayogi]

I have used this system in the US on a friend's brand new Mercedes C-Class. It gives an audible beep when you do something it doesn't like, like heavy acceleration or braking. Sounds good, on paper.

However, these are insurance companies, not known for showing honour or decency! The system beeped even when I braked a bit firmly, not even slightly hard braking, in order to NOT cut through a yellow signal light. God forbid what it will do if I brake enough to activate ABS. It was pesky and annoying and basically a way for them to show we drove badly, when we really did not.

Also, a final point. If I jam on the brakes to avoid a pedestrian texting on his/her phone, the system beeps and makes me seem like a worse driver, when in fact, I might have saved someone's life. How does that get justified? Just seems like a way to charge more money for 'rough' driving.

My solution is an overall camera based system where the beeps can be corresponded to real events to judge good or bad driving. That is, if you want such a system. Simply taking the movements of the car in isolation is a way of creating unreliable data and you know who will pay the price for that. Certainly not the insurance guys.

[speedmiester]

Personally I would like to stay away from such devices especially offered by the zealous insurers.
The system will only monitor the car, not the environmental circumstances. A swerve to avoid a pothole, a hard brake to avoid a jaywalker can be interpreted in a different way. The terms and conditions will always favor the insurer and can offer very little benefit to the car owners in the long term.

[ameet_pv]

This device not only calculates the usage but also gathers metrics on the driving habits, the travel patterns etc. We are kept in dark of the bench marks against which a user will be categorized as a good or risk prone driver, that can translate into a higher premium. The days are not too far when this data is shared among the insurance companies just like a credit score among the banks. I would personally stay away from this device

[Night_rideR]

My first post on TBHP.. so Hi to everyone. Seeing a lot of hate on Insurance companies and Corporate entities here so I thought I'd help clear something up. The only thing mandatory about Auto Insurance is the 'Liability Insurance' part. This protects other drivers and public/personal property. The other part (Comprehensive/Collision) is entirely optional. This protects your property i.e., the car. This usage based insurance would only reduce the cost of Comprehensive/Collision coverage. Some of the points mentioned by TBHPian tilt like selling personal data to ad companies, location tracking, etc are already done by companies like Google and Apple. In short - this isn't all that bad, people.

Disclaimer - I'm not affiliated with any insurance company

[asterix]

I think this is a step in the right direction which will end up benefiting the entire manufacturer- insurer-owner ecosystem. The data logged will be powerful to aid analytics for all three entities, resulting in opportunities to save cost, energy and perhaps lives as well.

Metromile in the US has been around for sometime and this is conceptually similar