The regulatory groundwork was laid in stages. Own damage premiums have long been free of tariff control, letting insurers price rather than follow a fixed schedule. In July 2022, IRDAI permitted general insurers to introduce technology-enabled options for the motor own damage cover, including ‘pay as you drive’ and ‘pay how you drive’. Use-and-file and regulatory sandbox reforms have since compressed the time it takes to bring a differentiated product to market.
Why Insurers Are Pushing Towards Precision
The commercial pressure is straightforward. India’s general insurance industry closed FY2026 with gross direct premium income of ₹3.36 lakh crore, up 9% year-on-year, according to a Boston Consulting Group analysis. The same analysis found the motor segment grew close to 9% even though auto sales rose 10.4%, as renewal-heavy portfolios limited the pass-through, while the industry combined ratio moved to 113%.
A combined ratio above 100 simply means insurers are paying out more in claims and expenses than they collect in premiums, before any investment income. In that environment, insurers cannot buy growth through broad discounting. The only durable route is to price each risk more accurately, charging less where the evidence supports it and more where it does not. Personalised pricing is, in that sense, a margin discipline that happens to benefit low-risk drivers.
What Actually Moves a Quote
● Insured Declared Value (IDV): The maximum own-damage payout; a lower IDV lowers premium but also lowers what you receive.
● No Claim Bonus: Rises with each claim-free year, reaching up to 50% after five consecutive claim-free years. Applies only to the own damage portion of the premium.
● Voluntary Deductible: A higher self-borne amount reduces premium and increases out-of-pocket cost at claim.
● Geographic Zone: Reflects local accident, theft and catastrophe experience.
● Add-ons Selected: Zero depreciation, engine protection and consumables each carry separate cost.
● Declared Usage or Driving Data: Under pay-as-you-drive and pay-how-you-drive options, mileage and behaviour feed directly into pricing.
Quote, Estimate and the Gap Between Them
The distinction matters more than it sounds. An online estimate is an indicative figure produced before underwriting inputs are confirmed. A quote is a priced offer against a specific IDV, a declared no-claim bonus and a selected add-on list. Customers frequently compare an estimate from one provider against a quote from another and conclude, wrongly, that one insurer is cheaper.
The disciplined way to compare is to hold three variables constant across every quote: the IDV, the no-claim bonus being claimed, and the exact add-on list. Vary any of those and the comparison collapses. It is also worth confirming that the no-claim bonus carried forward matches the previous insurer’s record. An overstated bonus is a common cause of a premium being revised upward after issuance.
The Data Question
Behaviour-linked pricing runs on personal data, and telematics inputs such as location, speed, braking and trip timing are personal data under the Digital Personal Data Protection Act. Consent has to be specific and informed, and customers are entitled to know what is collected, how long it is held, and how it translates into a premium.
Subhasree Nigamma, Head – Reserving, Motor Pricing and Analytics at Royal Sundaram, added: “Personalisation only earns trust if it is decipherable. If a customer cannot see which factor moved their premium, a lower price feels like luck and a higher one feels like a penalty. Transparency is not a compliance exercise here. It is the product.”
Taking the Next Step
For car owners, the practical takeaway is that the quote is becoming negotiable in a way it was not a decade ago, not through haggling but through inputs. Reviewing the IDV, protecting the no-claim bonus by absorbing small repairs, choosing a deductible deliberately, and declaring realistic annual mileage where usage-based options exist all move the number.
Insurers such as Royal Sundaram allow customers to adjust IDV, deductible and add-ons while generating a car insurance quote online, making the trade-offs visible before purchase rather than after a claim.
