Pay As You Drive Insurance

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.

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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.

Features of Pay As You Drive Insurance

Take a look at some of the most interesting features of pay as you go car insurance:

  • Part of the pilot sandbox project of IRDAI
  • Policy tenure of one year
  • More affordable as compared to regular car insurance
  • IRDAI decides the third party premium
  • Own damage premium depends on car usage slab as per the total kilometres covered

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How Does Pay As You Drive Insurance Work?

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:

  • 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. You can choose one of the car usage slab options provided by your insurance company. The car usage limit under each slab may vary from one insurer to another. For instance, Bharti AXA provides kilometre coverage slab options of 2,500 Km, 5,000 Km and 7.500 Km.
  • Your insurer will install a telematics device in your car without charging any money for it.
  • If you wish to customize your plan by adding any add-on covers now is the time.
  • The premium will be charged based on the kilometre slab you pick and the add-on covers you choose.
  • The telematics device will track the kilometres covered by the car and show the remaining kilometre balance. It will also monitor how the car is being used and the driving habits of the driver.
  • Once the balance has been exhausted, you will have to get it recharged by contacting your insurance provider. The recharge is possible in between the policy tenure as well as at the end of the policy term.

Benefits of Pay As You Go Car Insurance

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:

  • Lower Premiums

    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.

  • Free Telematics Device Installed

    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.

  • Custom Coverage

    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.

  • Discounts on 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

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 behaviour of car owners, the pay as you drive insurance has been designed for the following kinds of people:

  • It is ideal for car owners who drive their vehicle very less.
  • It is perfect for people who own multiple cars and do not use all the cars in equal measures.
  • It is tailor-made for people who mostly commute through public transport and rarely use their personal car.
  • It is suitable for people who are often required to travel out of station and are unable to use their car a lot.

How to Buy Pay As You Drive Insurance?

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:

  • Select the option of buying car insurance
  • Choose a usage slab option as per the kilometre that the car is likely to cover in one year
  • Enter the details of your car’s odometer
  • Provide the other KYC information requested, such as your phone number, name, etc.
  • Fill-in the customer consent form
  • Select any add-on covers that you want to include in your policy
  • The premium amount will be shown as per the car usage slab
  • Pay the premium amount online
  • Pay as you drive insurance will be issued to you

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What Happens if the Declared Car Usage Limit is Exhausted?

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.

Insurance Companies That Offer Pay As You Drive Insurance

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 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:

  • Bharti AXA Car Insurance

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Pay As You Drive Insurance Reviews & Ratings
4.4 / 5 (Based on 40 Reviews)
(Showing Newest 15 reviews)
K.c. Pur, September 30, 2020
Mandate plan
It is very important to have the car insurance plan and I got it done from the policybazaar. I have safeguard my life easily and I am very much happy. Thank you policybazaar.
Ichoda, September 30, 2020
Good plans
With the help of the policybazaar I have got to know about different plans and the policies related to my car. I am much happy and satisfied with the services. Thank you team policybazaar.
Habra, September 29, 2020
Customer coverage
I have opted for the car insurance policy from the policybazaar and have customised different plans at their website. Thank you policybazaar.
K.c. Pur, September 29, 2020
Perfect plan
I really like my car insurance plan which I have purchased from the policybazaar and it is one of the amazing plan. Thank you policybazaar.
Sabang, September 28, 2020
Calculate premium
I have calculated the premium of the car insurance policy online and it is good. I got to know about different premium rates as per my convenience. Thank you policybazaar.
Fakirpur, September 28, 2020
Happy customer
I am one of the happiest customer of the policybazaar. I found it better and convenient to use. Thank you policybazaar.
East Champaran, September 25, 2020
Hassle free
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Laharpur, September 25, 2020
My car insurance policy is very much cost-efficient in nature. I really like the plan and it is very good. Thank you so much team policybazaar.
Faridabad, September 24, 2020
Renew it
I have recently renewed my car insurance policy from the policybazaar and it can be done via the mobile application of the policybazaar.
Qadian, September 24, 2020
Soft copy
I received my soft copy from the policybazaar as I purchased my car insurance policy from them. They are quick.
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