Car insurance in India is changing fast - and telematics is at the heart of this transformation.
With usage-based insurance (UBI), your premium depends on how, where, and how much you drive, not just your car’s age or location.
From IRDAI’s sandbox programs to major insurers launching “Pay-as-you-drive” and “Pay-how-you-drive” models, Indian drivers in Hyderabad, Telangana can now enjoy personalized pricing based on real driving data.
This guide explains what telematics is, how it works, what devices are used, how insurers calculate risk, and how you can benefit with lower premiums and safer driving rewards.
What Is Telematics Insurance
Telematics combines GPS, mobile sensors, and onboard vehicle data to track how a person drives - speed, braking, mileage, acceleration, and route patterns.
Insurers use this data to calculate a risk score and customize the premium accordingly.
Key Components of Telematics:
- GPS-enabled device or mobile app.
- Accelerometer and gyroscope sensors.
- Real-time trip recording and scoring algorithm.
- Cloud dashboard for driver feedback and insurer analytics.
Types Of Usage-Based Insurance (UBI)
| Type |
What It Means |
Best For |
| Pay-As-You-Drive (PAYD) |
Pay based on distance or total kilometers driven. |
Low-mileage car owners. |
| Pay-How-You-Drive (PHYD) |
Pay based on driving behavior - braking, speed, acceleration, etc. |
Safe and consistent drivers. |
| Pay-As-You-Go Hybrid |
Combines both usage and behavior scoring. |
Urban commuters with mixed driving styles. |
How Telematics Affects Premium
Traditional policies price risk using static factors (car model, city, IDV).
Telematics adds dynamic data for more fairness and transparency.
Example:
| Factor |
Old Model |
Telematics Model |
| Distance driven |
Ignored |
Key metric |
| Driving style |
Ignored |
Tracked in real time |
| Time of day |
Ignored |
Higher risk for night driving |
| Accident alerts |
Manual |
Auto-recorded & geo-tagged |
Outcome:
Careful drivers pay 15-40% less than average risk customers.
How It Works - Step By Step
- Install a Telematics Device or App
- Provided by your insurer or linked to your OBD (Onboard Diagnostics) port.
- Drive Normally
- System records distance, speed, braking, and acceleration.
- Receive Driving Score
- App/dashboard rates your performance daily or monthly.
- Renew Policy with Discount
- Safer driving = lower renewal premium or cashback.
- Continuous Learning
- Some apps provide live tips to improve habits.
Advantages Of Usage-Based Insurance
- Fair pricing: Pay for how much and how well you drive.
- Safer habits: Drivers consciously improve performance.
- Instant feedback: Driving score helps reduce risks.
- Anti-theft benefits: GPS-based tracking assists recovery.
- Lower emissions: Encourages fewer unnecessary trips.
Potential Drawbacks
- Privacy concerns (location tracking).
- Data accuracy depends on device calibration.
- May not benefit drivers with high mileage or aggressive routes.
- Limited availability - still under pilot phase for most insurers.
Telematics Insurance In India - Current Status
- Approved by IRDAI under the Regulatory Sandbox initiative.
- Leading insurers like HDFC ERGO, ICICI Lombard, and Bajaj Allianz already offer PAYD/PHYD models.
- Usage-based car insurance is currently optional but expanding fast.
- OEMs (like Tata, Hyundai, MG) now bundle telematics devices in new vehicles.
- PolicyBachat platform supports instant quotes from telematics-compatible insurers.
Local Insights For Hyderabad
- % of insurers offering PAYD policies: 40%.
- Avg. premium savings for safe drivers: ₹5,000.
- Most common telematics model used: OBD-II Dongle.
- Popular devices or apps: Revv, Metromile, CarIQ.
- Best-performing insurers in Telangana: HDFC ERGO, ICICI Lombard.
Telematics Add-Ons To Watch For
| Add-on |
Description |
| Driver Behavior Discount |
Automatic premium reduction for high driving score. |
| Trip Analytics Report |
Monthly report of all driving sessions. |
| Geo-fencing Alerts |
Notifies when car leaves pre-set zone - great for family safety. |
| Emergency SOS |
Auto-notification to insurer and emergency contact after crash. |
| Anti-Theft Tracking |
Real-time GPS recovery support for stolen cars. |
How To Get A Telematics Policy
- Visit PolicyBachat or your insurer’s website.
- Choose “Usage-Based” or “Telematics” car insurance option.
- Install the provided app or plug-in device.
- Drive as usual - data starts collecting automatically.
- Review driving score and premium updates monthly or quarterly.
Future Of Telematics In India
- IRDAI working on nationwide telematics integration framework.
- OEM-linked policies becoming standard with connected cars.
- Hybrid PAYD-PHYD plans to cover both distance and behavior.
- Expect EV + Telematics bundles for smart premium optimization.
- AI-driven scoring to replace manual underwriting in next 3-5 years.
FAQs
What is telematics in car insurance?
Technology that tracks driving behavior to calculate premium.
Is telematics insurance available in India?
Yes, introduced under IRDAI’s sandbox model and now expanding.
How much can I save with usage-based policy?
Safe drivers can save up to 40% on renewals.
Do I need to install a device?
Either a plug-in OBD device or a mobile app, depending on insurer.
What happens if I drive more than my limit?
You can top up your coverage or pay extra for additional kilometers.
Does driving at night affect premium?
Possibly - frequent night driving may increase risk score slightly.
Is my data shared with others?
No, data is encrypted and shared only with insurer and regulatory bodies.
Can telematics detect accidents?
Yes, impact sensors trigger alerts to insurer and emergency contacts.
Is telematics available for old cars?
Yes, if they support OBD-II port or smartphone connectivity.
Does it work with EVs?
Yes, telematics is compatible with both electric and hybrid cars.
Does speeding increase premium?
Consistent overspeeding lowers driving score, reducing discounts.
Can I switch back to a regular policy later?
Yes, during next renewal - data won’t affect standard pricing.
What is a good driving score?
Above 80/100 generally qualifies for discount.
Can I use telematics across insurers?
Some devices and apps are cross-compatible - check before switching.
Do telematics policies include all add-ons?
Yes, most standard add-ons apply (Zero Dep, Engine Protect, etc.).
Customer Reviews
- “Saved 25% on renewal by switching to usage-based plan.” - Ravi P., Pune
- “Love seeing my driving score improve weekly.” - Sneha D., Bengaluru
- “Telematics app helped me avoid harsh braking habits.” - Arjun T., Delhi
- “Best innovation in insurance - fair to safe drivers.” - Neha M., Mumbai
- “Got cashback for low monthly mileage!” - Vikram T., Hyderabad
- “Pay-as-you-drive is perfect for my weekend car.” - Kavita R., Chennai