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Want motor insurance discounts for good driving behaviour? Zoomcar has a solution

Zoomcar is in talks with general insurers to offer Zoomcar Mobility Services (ZMS) based motor-insurance products in the Indian market. This will offer telematics based solutions where a device installed in your vehicle will observe your driving behaviour.

March 03, 2021 / 06:17 PM IST

Self-drive rental firm Zoomcar is in talks with general insurers to offer Zoomcar Mobility Services (ZMS) based motor-insurance products in the Indian market. This would mean that the customer would be able to get discounts in their comprehensive motor policies (own-damage covers) based on their vehicle usage and driving behaviour.

In an interaction with Moneycontrol, Greg Moran, CEO & Co Founder, Zoomcar said that the data will be collected based on a telematics device installed in the vehicle.

“We made it easy to install DIY for the customer. In case the device was not installed at the vehicle purchase, the customer can self-install the device,” he added.

Once the device is installed, it will collect data on how many hours the car/two-wheeler has been used, terrain/location where it is being driven, the speed at which it is driven as also the number of days it is used. When the vehicle’s motor insurance policy for own-damage is up for renewal, the ZMS data will be assessed by insurers to arrive at a premium. Moran said that ZMS can be upgraded to be used for three-wheelers and commercial vehicles as well.

Telematics-based motor insurance has been under discussion in India and the insurance regulator IRDAI has also favoured the use of such systems. However, it hasn’t yet taken off. Globally, good drivers are incentivised with premium discounts while bad drivers have to pay higher premiums.


Motor insurance consists of third-party (TP) mandatory covers that provide protection against liabilities to third party (pedestrian/other vehicle drivers) by a vehicle owner due to accidents. The comprehensive motor cover includes TP cover and an own-damage or OD cover. OD cover protects the vehicle from physical damages due to accidents, theft, wear-and-tear or natural calamities.

Moran explained that the device will be available for less than Rs 1,500 and customers may not require to pay for this. Once installed the device has a lifetime of up to five years or a capacity of upto 1,50,000 Kms.

“Our discussions with insurers suggest providing the devices free of cost in their effort to promote safer roads and only charging for insurance. Insurance markets of Southeast Asian countries such as Japan are already giving such devices free of costs and only charging for insurance. We hope to replicate it here as well,” he added.

The data collected by ZMS devices including customer driver scores, locations will be stored under complex data encryption algorithms which ensure 100 percent data protection, he added.

Motor OD covers are priced on the basis of the vehicle type, gender, claims history in that vehicle category and engine capacity. During renewal, past claims data and vehicle condition is scrutinised before reissuing the motor policy.

In places like Japan, customers are able to get up to 20 percent discount in their motor insurance premium at the time of renewal based on telematics device information.

Car insurance in India could range between Rs 5,500-35,000 per annum depending on the vehicle model. Installing a device to track driving behaviour could then potentially bring down the premiums between 5-20 percent, taking a cue from the models followed in neighbouring countries.

How will work?

ZMS Insurance is a driver score-based Insurance solution. Conceptually, Moran said that it is a type of Usage-Based Insurance (UBI) and typically falls under Manage How You Drive (MHYD) and Pay How You Drive (PHYD) models of UBI.

“Our idea behind this was that not all drivers drive with equal skill, customer's driving patterns are directly correlated to accidents and  drivers with good skill deserve an incentive. Such segregation would also promote safer roads and reduce accident rates,” he added.

As soon as it is installed into the vehicle, the telematics device captures vehicle events such as speed, location, clutch usage etc, and sends it to ZMS servers.

Moran explained that the ZMS algorithm analyses these parameters and calculates the driver score. Driver Score is an accurate reflection of the customer's driving behaviour.

“We will then assist the driver with our safe drive feature to share constant feedback on his/her driving pattern (acceleration, speed, braking etc), weather conditions, terrain, accident-prone zones, among others,” he said.

For users, he said that it reduces the premium and maintenance costs. Insurers benefit by lower accident rates and thereby lower claim payments.

“The previous telematics products in India, have failed to account for the user experience and requirements of constant customer engagement.  The ZMS algorithm is based on driver scores and vehicle events of more than 1 million customers. Hence it is highly accurate,” he added.
M Saraswathy is a business journalist with 10 years of reporting experience. Based in Mumbai, she covers consumer durables, insurance, education and human resources beat for Moneycontrol.
first published: Mar 3, 2021 06:17 pm

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