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. Read more

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.

Coverages Under Pay As You Drive Insurance

What is Covered in Policy

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 in Policy

Depreciation

Comprehensive insurance doesn't cover the usual wear and tear of the four-wheeler and its parts.

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.

Pay As You Drive
(PAYD) v/s 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:

Pay As You Drive (PAYD) Car Insurance

Comprehensive Car Insurance

Benefit

Since PAYD car insurance is a usage-based policy, you can save up to 85% on your premium if you drive less than 10,000 kms in a year.

A comprehensive policy is a complete insurance plan that offers coverage for damages to your own vehicle and third-party liabilities.

Premium

The premium for PAYD insurance is determined on the basis of distance traveled.

Its premium is calculated based on the insured car's make & model, age, location, add-ons, and Insured Declared Value (IDV).

Customisation

Pay as you go car insurance is highly customisable. You can choose a plan as per your preferred kilometer range.

Under a comprehensive plan, you only have the option to customise the IDV and add-ons.

Claims

You can raise a claim under the PAYD cover till you are within the kilometers slab you selected.

Comprehensive car insurance allows you to raise a claim till your coverage is active.

Validity

The validity of Pay as you drive insurance is typically 1 year. But, it may differ from insurer to insurer.

The policy's duration is generally one year, irrespective of the kilometers driven. The duration could be 3 years if it's a long term plan.

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. Read more

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.

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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)

FAQs About Pay As You Drive (PAYD) Insurance

Q1. What is pay as you go model in car insurance?

Ans: Pay as you go car insurance is a type of Usage Based Insurance (UBI) policy that allows car owners to choose a plan based on the number of kilometres covered and driving behaviour.
Q2. Is pay as you drive insurance good?

Ans: Yes, Pay as you drive car insurance helps you save on premiums, which are based on the kilometres you cover.
Q3. Which insurance company offers pay-as-you-drive insurance?

Ans: Several insurers in India offer pay as you drive insurance plans. You can visit Policybazaar.com or research online to find out which car insurance companies offer PAYD covers.
Q4. Can I buy PAYD insurance online?

Ans: Yes, you can purchase pay as you drive car insurance online either directly from the insurer's website or Policybazaar.com. The online process is simple, quick, and more affordable than offline.
Q5. Will I need any documents to buy pay as you drive plan in India?

Ans: If you are purchasing a pay as you drive insurance policy from Policybazaar.com, you will only need your car details to buy the same. You will need to upload some photos of your car as specified in the app and you are good to go.
Q6. What factors should I consider before buying car insurance based on km per year?

Ans: When buying pay as you drive insurance, consider your car usage and whether you own multiple cars.
Q7. When can I claim against my pay as you drive car insurance policy?

Ans: You can raise a claim under pay as you drive car insurance policy till the time you have not exhausted the pre-decided kilometres limit. Once you have exhausted the limit, you may be asked to make a co-payment by the insurer.
Q8. Will any telematics device be installed in my car if I get Pay as you drive plan?

Ans: No, you will not be required to install a telematics device in your car if you purchase a Pay as you drive plan from Policybazaar.com. All you need is to upload photos of your car's odometer reading on Policybazaar app to avail the required discount.

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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in