Similar to developed nations, motor insurers in India too have launched vehicle insurance which is referred as ''pay-as-you-drive'. Meaning to say, here you premium amount or insurance shall be based on the distance you travel or your usage pattern.
So, what is most lucrative here that riders through the option will be able to cut down on their insurance costs.
Importantly, these plans are being offered on a pilot basis for a year and is a comprehensive own damage (OD) plus third party (TP) policy
Insurance companies cite two benefits of such a plan:
1. Through the pay as you use insurance model, insurers will offer a more customized and responsive offering to vehicle owners.
2. Further, it is seen to bring in more users within the motor insurance coverage that still has a low penetration in India.
How Pay-As-You-Drive Insurance Works?
These are typically usage based insurance plan rolled under the regulatory sandbox of the insurance regulator IRDAI.. And based on the user's driving profile, there are other advantages that come with it including depreciation reimbursement, daily allowance, no claim bonus protection cover etc.
Here the prospective buyer of such a vehicle insurance coverage needs to pre-ascertain his usage for the whole one year. And based on the declaration made in km, insurance premium will be computed. There are currently several slabs available such as 2500 km, 5000 km, 7500 km, 10,000 km, 15,000 km and 20,000 km.
So, in case during the course of the insurance, your km wise usage gets exhausted you are allowed to switch to a higher slab through the top up option and can also make a shift to the usual motor own damage cover.
Where to buy these plans from?
These policies can be purchased from online insurance aggregators, distribution channels, agents and insurer themselves. You need to fill in the concerned consent form, provide your odometer reading as well as give your KYC details.
Pay-As-You-Drive Insurance Suitable for whom?
It is considered a better deal for users with mutilple vehicles who may not use each of the vehicle as much.
Also, those of you who use these owned vehicle only for personal purpose meaning to say they on a daily base commute using public transport, they also need to go for the offering.
Further, those of you who hardly travel beyond city should also consider the scheme.
Those with medical complications who seldom make use of their vehicle for them also the insurance shall serve best.