Pay as You Drive insurance

A Pay as You Go insurance plan enables you to pay premiums based on your car usage. Know more about it here
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Pay as You Drive insurance
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3 mins
30 July 2023

Insurance companies have evolved and designed insurance plans as per the modern needs of customers. Pay as You Drive car insurance plan is an innovative way to meet your insurance needs while keeping your premiums low. This insurance plan provides comprehensive coverage while allowing you to pay only for the distance you actually drive.

Many developed countries have ‘pay as you drive or pay as you go’ model in place. However, the concept is still new to India. Explore the benefits, features, and workings of Pay as You Drive car insurance below.

Features of Pay as You Drive car insurance

Pay as You Drive insurance offers several features that make it an attractive option for car owners in India.

Comprehensive coverage

Like comprehensive car insurance, you will get comprehensive coverage for your vehicle with this plan as well. You get coverage for damages caused due to natural disasters, theft, and accident-related incidents.

Coverage for third-party liabilities

Pay as You Drive insurance provides coverage for third-party liabilities as well. This means that if you cause an accident that damages third person's property or injures them, the policy will cover the expenses.

Pay as You Go insurance

Pay as You Go insurance, also known as pay-per-mile insurance, is an innovative approach to car insurance. With this type of insurance, you only pay for the miles you drive. If you use your car less frequently, you will pay less for insurance. It is an ideal option for those who do not drive frequently or have a second car that is not used very often.

Pay as You Go insurance is a flexible and cost-effective option that allows you to save money on car insurance premiums while still providing the coverage you need. It also works on a switch on/off model. This means you can switch on the own damage cover under this policy while driving and switch it off when not driving. You can use the app to use this function. You also get additional benefits if the own damage cover is switched off for more than 24 hours.

Benefits of Pay as You Drive car insurance

Pay as You Drive insurance comes with several benefits that best suits for those who do not drive frequently or long distances.

Customisable plan

Pay as You Drive car insurance offers a customised policy that caters to your specific driving needs. You can customise the plan coverage and premium as per actual miles driven and car’s usage, making it a cost-effective option.

Flexibility to recharge the plan on-the-spot

If you cross the declared distance on the plan, you can recharge the plan on-the-spot while travelling. This gives you the freedom to adjust the policy as per your driving needs.

Low premium

As the distance driven primarily determines the premium, Pay as You Drive car insurance comes at lower premium. This means if you use the car less, you pay a lower premium. This particularly proves beneficial for car owners who do not use their car frequently or for long distances.

How does Pay as You Drive car insurance work?

Pay as You Drive insurance uses telematics technology to track your driving habits and distance travelled. The process of buying and using Pay as You Drive insurance is relatively simple:

Buy the policy

Check with your insurer if they provide the Pay as You Drive plan. You can buy the insurance plan online.

Declare the kilometres travelled usually

You will need to declare your usual mileage, i.e., the distance you expect to drive in a year when you buy the policy. You can also decide to increase or decrease the mileage limit later if the need arises.

Telematics device

The insurer will install a telematics device in your car that uses GPS and other sensors to track your driving habits. It will track your speed, acceleration, braking, and the distance travelled. Your insurer will use this data to calculate your premium based on your actual usage of the car.

Who should buy Pay as You Drive insurance?

If you have minimum usage of your car, then you can opt for this plan. Pay as You Drive insurance will benefit especially those who drive less or for less distance throughout the year. Also, the following people can benefit from this type of insurance plan:

  • People who work from home or rarely commute to work by car.
  • Elderly people who use their car sparingly.
  • Students who only use their car occasionally.

How to buy Pay as You Drive insurance?

To buy Pay as You Drive insurance, you need to follow these simple steps:

  • Find an insurer in India that offers Pay as You Drive insurance.
  • Get a quote from the insurer based on your expected mileage.
  • Choose the coverage that you need.
  • Install the telematics device in your car.
  • Start paying only for the distance you actually drive.

Pay as You Drive car insurance is an excellent way to save money on car insurance premiums and get comprehensive coverage for your vehicle.

Frequently asked questions

When can I raise a claim for Pay as You Drive car insurance policy?

You can raise a claim on your Pay as You Drive car insurance policy if incurred damages caused by accidents, natural disasters, or theft. Contact your insurer to file a claim and follow their specific claim settlement process to get your compensation based on the policy terms and conditions.

Will I need to submit any documents to buy Pay as You Drive plan in India?

Yes, you will need to submit some documents while buying a Pay as You Drive plan. You need to provide your driving licence, vehicle registration number, and a copy of your vehicle purchase invoice. You may need to submit additional documents as per the insurance provider’s terms and conditions.

Does Pay as You Drive car insurance give coverage for vehicle theft?

Yes, Pay as You Drive car insurance covers vehicle theft. It also covers accidental damages and third-party liabilities. However, check the policy terms and conditions when buying, it may differ from one insurance provider to another.

Do I have to install a telematics device in my car if I get Pay as You Drive plan?

Yes, you need to install a telematics device in your car if purchased a Pay as You Drive car insurance plan. This device is necessary to track your driving habits and mileage covered to calculate your insurance premium based on actual usage. The insurer provides and installs the telematics device upon policy issuance.

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