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Pay as you drive insurance or PAYD car insurance is a smart and comprehensive car insurance model that will allow you to insure your car at affordable premiums depending on the usage of your car. You will choose a plan that will be valid for a year and will depend on the kilometres that you cover. Your car’s usage will be monitored by a telematic device which will be offered by the insurance company. Pay as you drive insurance is cost-effective compared to other car insurance models. You will have to renew the damage cover under this policy when your car usage limit is exhausted, though your third party cover will remain active.
Pay as you drive insurance is different from a typical car insurance. This new model of car insurance is user-friendly and will help you save money. Here is how this insurance model works:
The usage of the car on the basis of total kilometres travelled for a 1 year policy period is to be declared. Insurance companies offer different usage slabs, which can vary from insurer to insurer.
A telematics device will then be installed in your vehicle by the insurer, free of cost.
You can also include car insurance add-on covers to extend the coverage of insurance policy
The premium charged depends on the usage slab and add-ons you have selected
The telematic device will keep a track of the distance covered, the driver’s driving habits and the remaining travel balance
When the balance is exhausted, you can contact the insurer to recharge it. This can be done during or at the end of the plan tenure
Pay as you drive insurance is a futuristic car insurance model that will limit your expenditure on premiums while offering you a great range of features and benefits. Here are the features and benefits that you will enjoy with the PAYD insurance policy:
The total distance travelled will determine the premium amount of the insurance policy. So if you don’t use your car frequently, your premium rate will be low. The usage slabs are fairly low thus making premium amounts more affordable than regular insurance.
The telematics device records your car’s driving information including the distance you drive and how fast you drive. This device aids the insurance company in monitoring your car’s usage. It also provides you information about your usage and remaining balance. The telematics device is installed free of cost by the insurance company if you opt for the pay as you drive insurance.
You can customise your PAYD car insurance plan by including add-on covers and shift usage slabs. This will benefit you by making a tailor-made policy for yourself that fits your driving needs.
Pay as you drive insurance also offers discounts on premiums on your own damage insurance. The discounts range from 5% to 25% depending on the insurer.
Here is a list of what is covered and what is not covered under the PAYD car insurance:
Damage to the car in a road accident if you hold a valid licence
Damage to the car in a road accident if you do have a valid licence or driving in a drunken state
Damage to the car in a road accident if you were driving in a drunken state
Damage due to man-made or natural calamity
Damage caused by wear and tear
If you want to buy the pay as you drive car insurance online, it is a hassle-free and swift process. Here are the steps to follow:
Go to the website of the select insurance provider and head to the ‘buy car insurance’ page.
Select pay as you drive or pay as you go car insurance
Pick a usage slab depending on your annual car usage
Enter the car’s odometer details and KYC information such as your name, contact number, etc.
Fill out the consent form
Choose add-on covers, if you wish to
Your premium will be calculated according to the chosen usage slab and displayed. Pay the amount online, and the insurance will be issued in your name
It is mandatory as well as wise to get your car insured. Pay as you drive insurance policy is a great deal for you if you do not often drive your car. This insurance model will save you money if you own a car but use it occasionally. Pay as you drive insurance is meant for you if you own a car but use public transport most of the time. It is also a good choice if you are a frequent train or air traveller. Also, it is meant for you if you own several vehicles and do not use all of them often.
Pay as you drive insurance plans are available with several usage slabs which differ from insurer to insurer. Some insurers offer annual usage slabs of 3000 kms, 5000 kms and 7500 kms. It is possible that you can exhaust your car’s usage limit before the policy’s expiry date. In such a scenario, you can recharge on the policy expiration date or even during the policy tenure. You can shift to a higher usage slab for which you might have to pay a higher premium. You will have to renew the damage cover if your car usage limit is exhausted though your third party car insurance cover will remain operational for the rest of the policy tenure.
If you drive your car occasionally and do not want to be burdened by paying huge insurance premiums, the pay as you drive insurance is a smart option for you. Pay as you drive insurance allows you to select a premium by the kilometres that you will travel annually. It will also provide you with the add-on options to make your policy more comprehensive. This insurance policy will help you save money while insuring your car at a low premium.
The pay as you drive insurance policy was introduced and approved by Insurance Regulatory and Development Authority of India (IRDAI).
Insurance Regulatory and Development Authority of India (IRDAI) approved the usage-based pay as you drive insurance policies in July 2022.
The benefits of the PAYD car insurance policy include lower premiums, discount of premiums, option to customise your plan and a free telematics device which will monitor your car’s usage.
Yes, the pay as you drive insurance policy covers the third-party damages.
The IRDAI approved multiple insurance providers that offer pay as you drive insurance are Bajaj Allianz and HDFC Ergo.