Road accidents are very common in India. Did you know that over 4.6 lakh road accidents took place in India in 2022 alone? That’s more than 1,200 accidents a day, a staggering number that has prompted insurers to rethink how they assess risk. Until recently, car insurance premiums were calculated mainly on factors such as type of vehicle, city of registration, history of past claims, etc.. However, due to the presence of digital insurers and advanced telematics, your driving habits are becoming an important factor in determining your insurance premiums.
Forward-thinking insurers like ACKO are leading the way by offering data-driven, customer-centric car insurance solutions. This means that careful, responsible drivers may soon benefit from lower premiums, while risky driving could lead to higher costs. In this guide, we break down how driving habits influence car insurance premiums and what you can do to stay on the right track.
In India, car insurance premiums were traditionally based largely on predetermined factors, such as the make and model of the car, the age of the driver, claim history and location. But with the use of telematics and usage-based insurance plans, insurers are starting to take into account how an individual drives.
Driving behaviour is a good indicator of risk. Safe and cautious drivers are statistically less likely to make claims, whereas aggressive or careless drivers are more likely to attract accidents and, therefore, higher payouts of claims. In response to this, insurers are shifting towards more personalised premiums, where good driving behaviour is rewarded and high-risk behaviour penalised.
This change is being led by digital-first insurance companies such as ACKO, which use technology to make more accurate risk assessments. There are also some insurers that provide app-based or device-based monitoring, which tracks driving habits and assists in building a driver risk profile. This profile will then be used to adjust your premiums and the process will be more dynamic and fair.
Although every driver has to undergo the usual insurance assessment, some driving behaviours can make a significant difference in terms of premium rates. The following are some of the major behaviours that insurers can look at to determine your risk profile:
Good driving habits can positively impact your car insurance premium, especially under newer, data-driven insurance models. While traditional policies often apply flat rates, digital insurers are increasingly rewarding safe drivers with discounts, benefits or renewal perks. Here is how good driving can work in your favour:
Just as safe driving can lower your premium, risky driving behaviour can lead to higher insurance costs, or even policy denial in extreme cases. Insurers view poor driving habits as red flags, indicating a higher likelihood of claims. Here are some consequences of bad driving on your car insurance:
Improving your driving behaviour not only makes roads safer but also helps reduce your car insurance premium over time. Here are some practical tips to build better habits and potentially lower your costs:
Your driving habits play a bigger role in your car insurance premium than you might think. With the rise of telematics and usage-based models in India, insurers are increasingly rewarding safe, responsible drivers while charging higher premiums to those with riskier profiles.
By adopting better driving practices, like following speed limits, avoiding harsh braking and reducing unnecessary mileage, you can lower your long-term insurance costs. Platforms like ACKO are making this easier with tech-enabled tools that track behaviour and offer personalised pricing.
Disclaimer: This article is sponsored content curated by HT Syndication. The inputs and details accounted for in the article do not necessarily reflect those of HT, and HT does not endorse or assume any responsibility for the information provided.
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