How good is a 'digital' motor policy?

Rajalakshmi Nirmal BL Research Bureau | Updated on January 01, 2020 Published on December 30, 2019

Online-only insurers Acko and Go Digit offer lower premiums, but do pay attention to the network garages before you make a choice

Motor insurance policies from Acko General Insurance and Go Digit General Insurance have become quite popular, particularly among the youth.

Ease of buying and significantly lower premiums relative to the rest of the market are the main draw.

Given that the two insurers are almost 100 per cent digital and have limited physical branches, they offer a 20-30 per cent lower premium compared to traditional players in motor insurance. Though currently the two together hold less than 3-4 per cent of the motor insurance market, they are growing at breakneck speed, data reveal.

So, the next time you renew your motor insurance, should you also go for these start-ups? Here’s an evaluation of the two players based on ground-level checks and the information available publicly. For comparison, we also look at the policy of ICICI Lombard, the largest private sector motor insurer, and the difference it brings to the table.

Acko General Insurance

Acko, a general insurance company that began operations in September 2017, was established by Varun Dua, who is also the co-founder of Coverfox, an online insurance aggregator. The company’s product portfolio includes motor, health, mobile and travel insurance. Global investors including Amazon, Catamaran Ventures and SAIF Partners have invested in it.

What’s covered? The policy is similar to other regular motor policies in the market. It covers damage to own vehicle/third party vehicle following an accident or natural disaster or fire. It also covers loss of the policyholder’s vehicle due to theft and provides personal accident cover for the owner of the vehicle. Zero depreciation cover is available as an add-on cover.

What’s not covered? Similar to regular motor insurance policies, accidents caused by drunken driving, or by a driver without a valid driving licence, are not covered. Also, any damage to the insured vehicle which is not a direct result of the accident is not covered.

Cashless service: Available across over 1,000 garages across the country.

Buying process: Give your car number or brand and answer a few simple questions. Then, select the insured declared value (IDV) of the vehicle. Pay the premium online and the policy document will be mailed within a few minutes. The whole process gets done in five or six minutes.

Claim process: Register your claim by calling the toll-free number or recording it on the company’s website. If you are from select cities — Chennai, Delhi, Hyderabad, Mumbai and Bengaluru, among others — your vehicle will be picked up for repair in 60 minutes and the surveyor from the company will assess the damages. If you are from other cities, you have to take the vehicle to the garage yourself. Documents including your car’s registration certificate (RC), your driving licence and a copy of the insurance policy need to be provided when the vehicle is picked up. If the claim is accepted, the car is repaired at a network garage and delivered to you.

Claim settlement: According to the company, 72.4 per cent of the claims get settled in 15 days; the settlement ratio improves to 99.5 per cent in 90 days.

Customer assistance: 24x7 support is available.

Go Digit Insurance

Go Digit, founded by Kamesh Goyal, started operations in 2017 with insurance for cars, bikes, bicycles, travel, home and mobile phones. The company is backed by Fairfax Holdings.

What’s covered? The same as in regular motor policies. Zero depreciation, engine protection and return-to-invoice covers are available as add-ons. You can also get a standalone third party liability cover.

What’s not covered? Regular exclusions (similar to Acko General Insurance).

Cashless service: Available in over 1,400 garages across the country.

Buying process: Go to the website, choose ‘car insurance’, enter the registration number or brand and choose the variant. Provide details of the previous insurer and type of policy. The site will inform you of the premium amount, which you can pay online.

Claim process: You can call the toll-free number and record the claim, following which you will get a link for self-inspection on your mobile number. You then have to click pictures of the damages on your smartphone through a guided step-by-step process. The Go Digit team will then assess the damages and get back with an estimate of how much you can claim. Hard or soft copies of the relevant documents need to be provided. You can then proceed for cashless repairs across the listed garages. The company also offers pick-up and drop facilities to and from the garages.

Claim settlement: The claims settlement ratio for FY19 was 94.84 per cent, according to the company.

Customer assistance: 24x7 support is available. The average turnaround time for two-wheeler claims is 11 days, claims the company.

ICICI Lombard

ICICI Lombard is the largest private insurer in the motor segment. To give you a sense of the size of operations of the company, in FY19, it collected around ₹6,400 crore of premium through its motor policy; Acko collected ₹75 crore and Go Digit, ₹854 crore.

Cashless service: Available in 8,300 garages across the country.

Buying process: Give the car number or brand and select the model and year of purchase. This will show the premium for different plans. Make your choice and pay online. Here, too, there is no need to provide documents at the stage of buying the policy. Add-ons include zero depreciation, engine protection, key protect and consumables cover. You can buy the policy both online and through traditional channels.

Claim process: There are two ways to do this. To do it online, download the company’s ‘Insure app’. It has a live video streaming feature, InstaSpect, by which you can register the claim and get immediate approval from the surveyor. The required documents can also be uploaded on to the app. You can make a request for a free-pick up to the garage. If it’s a network garage, the vehicle will be repaired cashless.

The second option to make a claim is to take your vehicle to a network garage. Fill the claim form and provide the documents such as RC and driving licence. The surveyor at the garage will inspect the vehicle and authorise the claim. The vehicle will then be repaired and delivered to you.

Claim settlement: For FY19, the company has reported a claim settlement ratio of 98.8 per cent.

Customer assistance: 24x7 support is available.

Our take

By buying motor insurance from digital players, you can save money. If you are an Amazon customer, you get an even cheaper premium from Acko. With Go Digit, you get more add-on covers and a standalone third party liability cover — these are not available with Acko.

Now, should you go for new-age insurers? The answer is — yes. IRDAI data show that the two insurers have been settling close to 99 per cent of their claims in less than three months. However, before you buy a policy from Acko/Go Digit, check the list of network garages to see if they have enough options in your area.

With ICICI Lombard, you get the convenience of buying online through a smooth process, there are more listed garages, and road-side assistance is in-built with the policy. However, the premium is higher.

The premium on a comprehensive cover inclusive of the mandatory personal accident cover for a two-year-old Maruti Baleno for IDV of ₹5.03 lakh is ₹14,604 in the case of ICICI Lombard (includes ₹199 for road-side assistance). In the case of Go Digit and Acko, the premium is ₹11,015 and ₹9,276, respectively.

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Published on December 30, 2019
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