MERGING TWO KEY TRENDS IN PERSONAL TRANSPORTATION IN INDIA “Transportation as a service” and “user based insurance” Bibhu Kar CISCO
them with the variances or risk that decides the premium.
Bibhu Kar has exper se on data centers, cloud and cyber security technologies. He is an author, speaker and blogger on topics spanning technology, government policies, management and leadership.
When one purchases a personal vehicle, the vehicle is bought in owner’s name. Whether the owner is also a driver or not, is not checked. The registra on is in the name of the owner. The vehicle is insured based on the make and price and linked to the registra on number. Although a list of demographic details of the owner is acquired by the insurance company, such as age, marital status, usage etc. those are not factored scien fically in to the risk assessment.
Have you ever wondered, when your driver took your car to pick up your children from school and something unfortunate happens, what will be covered by your vehicle insurance? When you rest a car from a self-driving car rental company for your next vaca on, are you able to get a be er rate for the rental insurance because of your impeccable driving e que es? Why cannot you move your No Claim Bonus from your old car to a new car when you upgrade? Are you considered a “third party” while taking an app based taxi ride to work, from insurance perspec ve? You have hired a driver or called in someone from a service provider temporarily. What is your legal liability towards your paid driver? Are you aware, if your car is not self-driven you need to buy a cover for your driver, under the Workmen Compensa on Act. The size and premium for this cover are both fixed. Now, let’s look at the components of personal transport in its many forms that can individually be insured. And segregate PG.28 | Smart Automo ve | Sep - Oct 2017
On top of that, many elements are added on to the base package. Such as third party insurance (which is mandatory now), while third party is defined as some one outside of the vehicle. This specifically excludes the driver and the co-passengers. There are other add on elements like 24x7 road side assistance, which is a flat charge, not linked to the condi on of the vehicle or past record of failures. The only element that plays a role in discoun ng the premium of a car today in India, is NCB or No Claim Bonus. But even that is a ached to the registra on number, not to the driver who was at the wheel when the accident happened. It also does not reflect, if the accident was because of a fault of another driver. All it tracks today is whether the owner of the vehicle claimed any insurance for any covered damage to the car. The urban personal transport in India is mostly self-driven and personally hired driver driven vehicles. However, it is changing rapidly.
Most metropolitan owner-drivers are calling in an app based “Driver by hour” in the evening hours way back from office, if they had to take a couple of drinks in a business social. Car-pooling, shared transport is increasingly common place. Self-driven rental cars are gaining momentum in India. It is just a ma er of me before companies provide self-driven, app based city transport in line of Zipcar, USA are available in India as buying and owning a personal vehicle becomes more and more expensive, cumbersome and most importantly unnecessary. There is a clear trend towards “Transport as a Service” and congested ci es and crumbling infrastructures of India would need to make this transi on sooner than later. The millennials are increasingly looking to free themselves from the hassles of owning a vehicle. So the fundamental way to address all the changes in the transport trend, we need to separate the insurable components of
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