The Future is Here: Now Pay Only For Miles You Drive

Bharti AXA General Insurance has tied-up with PolicyBazaar.com to sell 'usage-based motor insurance' policies for private car owners, which has recently been launched under the regulatory Sandbox project. 

In the post-Covid-19 world, where most people are staying at home and practicing social distancing, the Pay As You Drive policy becomes all the more relevant. The policy is also ideal for those who have multiple vehicles and do not use each vehicle as much. As the lockdown situation continues, traffic on Indian roads has been reduced to bare minimum. And, with work from home becoming the new normal — gaining a wider acceptance — the number of vehicles on the road are all set to go down.

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Earlier this year, in January, the Insurance Regulatory and Development Authority of India (IRDAI) approved various proposals under the regulatory sandbox and ‘Pay As You Drive’ model was one of them.

WHAT IS PAY AS YOU DRIVE?
'Pay As You Drive' is a usage-based cover, which will be a combination of comprehensive own damage (OD) and third party (TP) cover. In this policy, TP premium will be decided as per the regulator’s norms, and the comprehensive OD premium will be calculated on the basis of how many kilometers you intend to drive your car in a given time period. 

Currently, it is being offered on pilot basis, wherein customers can choose three slabs as per their needs - 2,500 km, 5,000 km and 7,500 km. If, after purchasing the policy, you are about to breach the limit, you get an option to ask the insurer for an endorsement of policy by paying an additional premium. Though this should be done before the expiry of the policy. 

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"Driving related parameters would mean driving experience, driver’s past history, demographics etc. Secondly, it should also include the amount of usage of vehicle in terms of kms driven, duration of night time vs day time driving, duration of highway driving vs within city limits etc, the future for sure is there. This product addresses to an extent the second point and products such as these act as a bridge between the present and the future," he adds.  

HOW TO BUY THE POLICY?
The process to buy Pay As You Drive cover is the same as for the rest of the car insurance policies bought on Policybazaar. The only change would be that you will have to choose a slab as per the usage of your car after which you will have to give an odometer reading (via PB-Inspect app) and provide KYC details for buying the product. The entire process is digital. Therefore, you can buy the product even during lockdown without worrying about stepping out of your house. 

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