Pay as you drive is a kind of comprehensive car insurance plan that charges a premium based on the usage of the car. It uses a telematics device to monitor how often the car is used depending on the total number of kilometres covered.
It is a newly-launched usage-based car insurance plan for private cars under the sandbox project of the IRDAI or the Insurance Regulatory and Development Authority of India. The project is currently available on a pilot basis for one year.
The pay as you go car insurance is considered more affordable as compared to regular car insurance plans. This is because the premium under this plan is charged based on the kilometres driven.
Take a look at some of the most interesting features of pay as you go car insurance:
The pay as you go car insurance functions slightly different than a regular car insurance policy. Take a look at how pay as you drive insurance works:
The pay as you drive insurance comes with several benefits that will make you fall in love with it. Take a look at the benefits of pay as you go car insurance below:
The premium amount under the pay as you drive insurance is calculated based on the total number of kilometres covered by your car. Besides, the usage slab is pretty low. Therefore, the premium turns out to be much lower than that of regular car insurance.
Under this type of car insurance plan, a telematics device is installed in your car free of cost. This device constantly monitors the condition of your car and the driving habits of the insured.
This insurance allows you to customize your car insurance cover as per your preference by opting for add-on covers. Moreover, it also allows car owners to shift to a higher usage slab or convert into a regular own damage cover if they have exhausted their car usage limit, provided they pay the additional premium.
Under the pay as you drive insurance, premium discounts are offered by insurance companies on own damage insurance premium. Car owners can get a minimum of 5% discount to up to 25% discount depending insurance company
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 behaviour of car owners, the pay as you drive insurance has been designed for the following kinds of people:
Motor insurance company, such as Bharti AXA Car Insurance, has collaborated with Policybazaar to offer pay as you drive insurance to private car owners. In order to buy pay as you go car insurance online, follow the steps given below:
In case your car usage limit gets exhausted, you can recharge it in between the policy tenure or at the time of policy expiry. Pay as you drive insurance also gives you the choice of moving to a higher kilometre usage slab or shifting to a regular own damage car insurance, provided no claims have been made. However, you will be required to pay the difference in the premium amount.
Moreover, the third party cover under the pay as you drive insurance will continue to remain active even though the own damage cover will cease to exist until the plan is renewed. This means you cannot make any own damage claims if you have driven your car more than the declared kilometre limit.
IRDAI has approved several motor insurance companies to offer pay as you drive insurance during the first tranche of sanctions. The approved companies include Tata AIG Car Insurance, Go Digit Car Insurance, ICICI Lombard Car Insurance and Bharti AXA Car Insurance amongst others. These companies are required to sell at least 10,000 pay as you drive insurance policies within six months in order to offer it as regular car insurance.
However, not all companies have launched their pay as you go car insurance plans as yet. Here is a list of motor insurance companies in India that are currently offering pay as you drive insurance for private cars on a pilot basis. Take a look: