Car services startup Pitstop, which offers doorstep and garage-based repairs for four-wheelers, plans to use driver behaviour and vehicular diagnostic data to offer customized auto insurance packages to its customers, according to a top company executive.
The startup’s chief executive Mihir Mohan said that Pitstop has completed over 80,000 four-wheeler repairs since its launch in early 2016. Data points captured from on-board diagnostic (OBD) devices, gravity meters, AC sensors, and other vehicle tracking devices will be used to customize Pitstop’s insurance product for its customers, he added.
The company is currently working with motor insurance firms for a commercial launch, according to Mohan. Apart from this, a user’s driving behaviour captured from OBD devices and other car sensors will also be used to determine policy renewal price, as well as for insurance claims.
“Currently, Pitstop’s insurance product is in beta test mode, we will announce a full-fledged launch in July," said Mohan. Pitstop currently operates in seven cities including Bengaluru, Delhi, Pune, Chennai, Hyderabad, and Mumbai.
Mint reported in June last year that telematics-based insurance products, which use data from vehicle trackers, had hit a blockade due to regulatory oversight. However, the Insurance Regulatory and Development Authority of India (Irdai) in November established a working group to address new policy changes and technological innovations on both motor and health insurance segment.
At that time, Irdai said that telematics-based data can benefit policyholders by rewarding them with a lower policy renewal amount for good driving behaviour. It also suggested using driving behavioural data to offer a “pay-as-you-go" option for motor insurance holders.
A user’s driving behaviour data captured from car sensors include parameters like acceleration and braking behaviour, distance covered, and other information like car servicing history and fines linked to car. India’s current data protection framework does not classify such data as sensitive data, but some policy experts and lawyers differ.
Suneeth Katarki, founding partner of IndusLaw, said that since such data points are being linked directly to the user, and is being processed to determine policy renewal rates and claims, it can be likely categorized as “sensitive personal data".
“As per India’s upcoming Privacy Act, sensitive data requires explicit consent, because there must be legitimate purpose, and the extent of data collection also needs to be proportionate to that interest. The intent should not be that only the insurance company is benefited; the consumers should also be benefited equally, and can eventually be used to promote good driving behaviour by charging lower premiums from safe drivers," added Katarki.
For its upcoming insurance product, Pitstop will mainly focus on post-accident vehicle care, and processing insurance claims after an accident or damage is reported by the user.
Currently, Pitstop has over 175 garage brands across the country and over 150 independent mechanics on its platform. It has plans to hire over 5,000 mechanics in the coming months and operate mobile repair vans, and stocks four-wheeler repair parts as well.
Mohan said that these resources will be dedicated towards its upcoming motor insurance product as well. “Insurance almost always starts with an accident, and the kind of support we have on the roads and highways is very limited. We want to build transparency across the entire motor ecosystem which includes garages, banks, insurance firms, original equipment manufacturers, towing service providers, and several others," Mohan said in a phone interview.
Pitstop will also integrate its existing SOS feature available on its mobile app for post-accident vehicle care. “We also want to standardize prices of spare parts on our platform, once the vehicle diagnostics is done after an accident incident," added Mohan.
Till date, Pitstop has raised two rounds of funding worth $2.9 million from investors, including Blume Ventures and Goldbell Ventures. It generates a monthly revenue run rate of ₹2.85 crore, according to the company.