The way one person uses their car or bike may vary vastly from another. It is influenced by your overall lifestyle, what you do or don’t do, and a few other factors. Some may not drive their vehicle as frequently as commonly assumed, and some may utilise it above and beyond the average expectations.
Keeping this in mind, the insurance industry is bringing about some changes that may help you save some money on your insurance policy. A new offering from the vehicle insurance
sector allows you to pay for your insurance on the basis of how you use your vehicle, be it your car or your bike. This type of insurance is known as ‘pay as you drive insurance’
If you are looking to renew your car insurance
or looking to buy a new one for the vehicle you have purchased, you can now consult your insurance provider about the pay as you drive insurance
policy. This type of policy can be availed of even if you are looking to renew or purchase a fresh bike insurance
What is pay as you drive insurance?
This is a concept that has already been explored in a few other countries across the world. In India, this is the first time that this concept is being offered at such a scale. Slowly but surely, almost all major general insurance providers are offering this new form of vehicle insurance
Also referred to as the Switch On/Switch Off policy, this form of car and bike insurance
can prove useful for people who do not use their vehicles as frequently. When you buy this cover, you do not get any concession on the premium you pay. As with older policies, the full premium has to be paid as a single amount, upfront, at the time of policy purchase.
However, you can expect to save in the form of refunds on your own damage cover costs. You will be allowed to control your Own Damage cover through an app which will allow you to switch this cover on and off. For each day that your cover is turned off, i.e., when you are not driving your car, you may be able to earn a bonus day.
Your percentage of concessions may depend on the number of bonus days you earn by switching off the own damage cover. For example, if you have switched off your policy for about 20 to 60 days during the year, you may earn about 15% concession on your premium. If the policy has been switched off for over 121 days, it may earn you 40% off. * Standard T&C Apply
Pay as your drive plan features
Here are a few key features of the pay as your drive insurance that you need to know about, especially if you are planning to buy this policy.
This is a new type of policy. The way it is designed, makes it suitable for people who do not drive their cars or bikes as frequently.
It can help you save on the premiums for your comprehensive car insurance
Your premium will depend on how much you use your vehicle and how much you need to plan to cover it.
Unlike some regular vehicle insurance
covers that can offer to cover your vehicle for three years, pay as you drive cover is only available for a period of one year, i.e., you have to renew this plan annually.
* Standard T&C Apply
While this is not the norm yet, the insurer may require you to fix a telematics device in your car if you are opting for the policy. This is a device that tracks the kilometres travelled by your car. Since the plan works on the basis of the distance travelled, such a device may help keep track of the same. However, the plan is currently based on the declaration of the policyholder rather than tracking via telematics device.
Benefits of pay as you drive
The most attractive benefit of this policy is that it helps the policyholder save money on premiums, and thus, make the policy more affordable. If you do not use your car as frequently, and it sees a little off time, you can start saving on your vehicle insurance
with this plan.
Before you can buy such a policy, it is ideal to get an estimate of the premium you will be required to pay for it. For these policies, you will be required to pay an annual premium, as that is the duration of these policies. If you have a bike and want an estimate for a pay as you drive cover, you can use a bike insurance calculator
for the plan of your choice. Similarly, for a four-wheeler, you can use a car insurance calculator
. * Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.