Pay As You Go/Drive Insurance

Pay as you drive car insurance helps policyholders save up on their own damage premium based on the total number of kilometres driven in a year. It is a kind of comprehensive car insurance policy that helps policyholders reduce their premiums based on the usage of the car.

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What is Pay As You Drive (PAYD) Insurance?

Pay as you drive (PAYD) insurance is a flexible four-wheeler insurance policy that allows car owners to pay the premium based on the distance travelled and driving behaviour.

Instead of a fixed price, your car insurance premium is flexible and calculated on the kilometres you drive each year. This km based car insurance is for those who don't drive frequently, have more than one car or prefer responsible driving habits.

Features of Pay As You Drive Insurance

The Pay as you drive car insurance plan is beneficial and convenient for drivers who do not drive regularly as it can help them save up on their motor insurance premium. Take a look at some of the most interesting features of pay as you drive car insurance:

• The Pay as you drive is a cover that offers a discount depending on the car usage as per the total kilometres covered.
• The benefits of this plan can only be availed if the policyholder uploads a video of their car before their current motor insurance policy starts.
• A policyholder can save on own damage car insurance premium by opting this plan.
• Car insurance based on kilometres driven is beneficial for those who drive occasionally or have more than one car, some of which are not used more frequently.
• If the declared kilometres are about to exhaust, a policyholder can also top-up with more kilometres.

How Does Pay As You Drive Insurance Work?

The Pay as You Go insurance cover functions slightly differently than a regular car insurance policy. Take a look at how pay as you drive motor insurance plan works:

• Declare Car Usage: First, you need to declare the car usage for the policy period of one year based on the total number of kilometres that your car will cover.
• Odometer Reading: You will be required to declare the odometer reading of your car by uploading a video before the policy starts to avail the benefits of this plan.
• No Telematics: This plan is currently based on the declaration of the customer and no telematics device will be installed in the insured car.
• Premium: Once you are eligible for this plan, you can receive a certain discount on your own damage insurance premium.
• Claim Process: If the claim is within the specified limit then the claim will be settled as normal. However if it exceeds this limit, the policyholder may be asked to pay a certain amount as co-payment at the time of claim.

What is Covered Under Pay As You Drive Insurance?

The Pay as you drive car insurance offers the following coverage to policyholders:

• Third Party Liabilities: Any loss or damage you cause to other person or their belongings, including bodily injuries and even loss of life.
• Accidental Damages: PAYD insurance offers financial protection in case of damage to your car from a road accident, collision, fire, or natural/man-made disasters.
• Theft and Vandalism: Coverage for your car if stolen or vandalised, such as slashed tyres, broken windows, or any other type of defacing of the vehicle.
• Personal Accident Coverage: A few PAYD car insurance plans also cover any injuries you suffer in an accident.

What is Not Covered Under Pay As You Drive Insurance?

Now that you know about the inclusions under PAYD insurance, understanding its standard exclusions is also important:

• Usage Exhaust: If you exceed the pre-decided kilometres, it may lead to additional premiums or coverage cancellation (depending on the policy's terms).
• Driving Outside Geographical Zone: If your vehicle sustains any damage while being driven outside the areas specified in your PAYD policy, the insurer may deny any claim you raise.
• Normal Wear and Tear: Damages to the insured car due to usual wear and tear, such as mechanical or electrical part failures, are not covered.
• Negligent Driving: Any loss or damage to your car as a result of driving under the influence of alcohol or drugs, or without a valid driver's licence, is not included under the Pay as you Drive insurance cover.

Difference Between Pay As You Drive (PAYD) and Comprehensive Car Insurance

Here's a table to help you understand the main differences between comprehensive car insurance and Pay as you Drive (PAYD) insurance:

Who Should Buy Pay As You Drive Insurance?

Car usage varies for different kinds of people. Some may use them daily, while others may not use it as much. Taking cognizance of varying car usage, the PAYD car insurance has been designed for the following kind of people:

• Occasional Drivers: It is ideal for car owners who drive their vehicles very less, such as seasonal drivers.
• Multiple Car Owners: PAYD car insurance is perfect for people who own multiple cars and do not use all the cars in equal measures.
• Public Transport Commuters: This plan is tailor-made for people who mostly commute through public transport and rarely use their personal car.
• Out Station Goers: The pay as you drive cover is suitable for people who are often required to travel out of the station and are unable to use their car a lot.

How to Buy Pay as You Drive Insurance?

Follow these steps to purchase a Pay as you Drive plan from Policybazaar.com:

• From the homepage, select "Car Insurance".
• Enter your car number in the given form and proceed with car insurance quotes
• Select your car details such as model, variant, RTO, registration year, etc.
• Fill in the given form with your name, email and mobile number
• Provide your previous policy and no claim bonus details.
• Now you will be able to find the details of Pay as you drive plans offered by different insurers
• Select the desired kilometre limit and proceed
• To avail this plan, you will be required to upload photo of your car's odometer on Policybazaar app
• To upload the photos, log-in to the Policybazaar app from the same registered mobile number.
• Once you have uploaded the photos, you will be eligible for a discount on your premium
• Pay the discounted premium amount via desired payment mode
• Once you have paid the premium, your Pay as You Drive insurance plan will be issued.

What Happens if the Declared Car Usage Limit is Exhausted?

In case your yearly car usage limit gets exhausted, you can top-up your PAYD cover with extra kilometres. You can also switch to a comprehensive insurance policy on your next car insurance renewal.

Moreover, if your PAYD car insurance expires and you have covered the required kilometres, you will not be eligible for a discount on premium on your renewal policy. Thus, to avail car insurance based on km driven, you must upload photos of your car's odometer before the expiry of your policy.

How to Claim Pay As You Drive Insurance?

The PAYD insurance claim process is similar to that of a standard car insurance policy. Here are the steps:

• Inform your insurer immediately after the incident.
• Your insurance company will assign a surveyor to assess the damage sustained by your car.
• You will then need to submit the required documents to your insurer.
• Next, the insurer will verify your car usage and approve the claim.
• You can then take your car for repairs to an authorised garage for a cashless claim settlement.
• In case of a non-network garage, you will need to pay from your pocket for repairs, and the insurer will reimburse you later.

Documents Required for Pay As You Drive Insurance Claim

For a successful PAYD insurance claim processing, you need:

• Duly filled & signed claim form
• Your Pay as you Drive insurance documents
• Copies of your ID & Address Proofs
• Your vehicle registration certificate
• Police FIR (if applicable)
• Repair bills/Payment Receipts (if required)