Automotive industry trends and their impact on car insurance

In order to better serve its consumers, the Indian insurance sector is discarding jargon in favor of more simple insurance products and services. This makes it easier for both existing and prospective policyholders to comprehend insurance contracts and make wise choices. 

The next few years will see changes in the Indian auto insurance market as a result of the automotive industry trends that have already had an influence on international insurance businesses. Let’s discuss these trends and their impacts. 

Automatic cars

In comparison to the highly automated vehicles being tested by Google and Tesla Motors, automatic transmission automobiles that are already on the market in India are at a basic level. These vehicles strive for complete automation, where the concept of a "driver" is irrelevant because the vehicle is self-driving. Would the automobile insurance sector be hampered by such autonomous vehicles? Definitely not. They may impact the industry, though, by lowering the rate of accidents. Vehicle insurance for these automatic cars, however, covers theft and disasters in addition to accidents. 

Electric cars

Involved parties in the auto sector are now considering electric cars as a feasible alternative due to rising fuel prices and environmental concerns. However, the infrastructural gap is a challenge for electric vehicles. Based on the level of a car's damage in the event of an accident, the vehicle insurance market will view electric automobiles, assuming they become the standard in the ensuing years. Powerful, rechargeable batteries, which might catch fire in an accident, are a must to be covered in electric automobile insurance. The cost of the vehicle and its components must also be taken into account. 

Connected cars

Telematics may convert any sort of vehicle into a "connected vehicle," regardless of the vehicle you are driving. A "connected automobile" is a vehicle that has telematics equipment placed in it. In this way, it can monitor driver’s activity, which is helpful in figuring out the appropriate insurance premiums by checking the behavior (rash driving) and risk factor. Usage-based automobile insurance premiums can be assessed based on data collected about the vehicle, including its speed, the distance it typically goes, how frequently it stops suddenly, how much gasoline it uses, if safety precautions are taken, and more. 

Technology drivers

Driver training and onboard technology in the newest automobiles are projected to lessen the effect of crashes and accidents, consequently lowering the overall number of casualties. The telematics technology, which will enable insurers to give insurance based on the socioeconomic variables of drivers and their driving patterns, is another similarly clever idea. The cost of premiums throughout the industry may be impacted in the future by this individualized kind of insurance protection. 

With the use of telematics, a productive automotive industry trend, insurance firms will be able to revamp their products and improve risk selection. Some drivers may benefit from lower car insurance rates as a consequence, while others may receive poorer offers. This technology's ultimate objective is to make it easier to introduce totally customized auto insurance policies. 

Conclusion

The Indian car insurance market is starting to embrace the newly introduced automotive industry trends. The Insurance Regulatory and Development Authority of India (IRDAI) regulates this sector strictly, and rightfully so. Hence, rapid change is not possible since even efforts with the potential to change the game must be carefully considered before being approved.