The availability of Pay as You Drive (PAYD) in car insurance has brought significant changes in how policies for four-wheelers are bought and managed in India. It enables car owners to insure their vehicles in a more pocket-friendly way without compromising the extent of elaborate coverage they desire. In addition, PAYD brings tons of other benefits, making it a great deal for certain types of policyholders. Go through this page to find more information on Pay as You Drive and how you can opt for it when buying car insurance online.What is Pay as You Drive in car insurance?
Pay as You Drive (PAYD) is a component of car insurance that is aimed at individuals who rarely use their car, effectively helping them save a significant chunk of cash on policy premiums without compromising on the extensive coverage. It is a type of usage-based discount given on the basic Own Damage premium of the car insurance plan if the policyholder has driven their vehicle below the prescribed kilometre range.
For example, if a car owner rarely uses their car and it sits in the garage for most of the time, they will need to pay less premium for the same extensive coverage with PAYD. You should note that Pay as You Drive is not a standalone policy, instead, it is usually offered as an add-on feature in motor insurance by some insurers in India. Now, the benefits, discounts, mileage-based range quotas, etc., can vary from insurer to insurer for PAYD, so make sure to go through the policy wordings of the specific plan carefully before car insurance online purchase.
How does Pay as You Drive work in car insurance?
Now that we have explained what Pay as You Drive (PAYD) in car insurance is, let us go through the process of how it works. With Pay as You Drive insurance, the policyholder will be offered the benefits by the insurer at the end of the policy term only if they have driven their vehicle less than the specified mileage slab under PAYD. For example, if the selected mileage range under Pay as You Drive is 10,000 km, and you have not exceeded this range during the policy year, you will be eligible for its benefits. So, to simplify it, the benefits under Pay as You Drive are based on the total kilometres that you have driven within the policy term. Here are some additional points that you should know when opting for Pay as You Drive car insurance;Kilometre declaration: When opting for Pay as You Drive, you need to estimate and declare the total kilometres that you expect to drive during the policy term and pick a slab that you find fitting.
Odometer reading: Depending on the insurer, you may be asked to provide the odometer reading of the car prior to the start of the policy in a photo or video format.
Telematics technology: A special type of device may be used to collect accurate data on the four-wheeler’s speed, distance driven, driving pattern, etc., for proper assessment. However, in most cases, the PAYD is based on the customer’s declaration and doesn’t involve any use of telematics technology.
Premium calculation: The premium of the policy is calculated by the insurer based on the mileage slab that you have picked.
Premium adjustment: At the end of the policy term, your actual kilometres driven are then compared to the one you had initially declared. In case it is found that you have driven your vehicle more, you may need to pay an additional amount, whereas, if you were found to drive under the selected range, you can get a certain amount refunded.
Advantages of Pay as You Drive car insurance
When buying car insurance online, consider thoroughly researching PAYD. If it matches your usage and needs, you can invest in it and enjoy its benefits, such as;
Savings: If you are an occasional or a low-mileage driver, you can make significant savings on your car insurance premiums with Pay as You Drive.
Special incentives for safe driving: Some insurers offer additional discounts and offers with PAYD as a reward for safe driving. For example, you can get additional discounts on the OD premium during renewals for successfully going through a claim-free policy year.
Reasonable cost: Even though you pay less for driving less with PAYD, you still get the extensive car insurance coverage benefits, which makes it a very reasonable deal.
Usage-based premium: The premium of the insurance is calculated by the insurer based on the total distance the vehicle is driven. Hence, you don’t have to spend extra if your car use is limited.
How to opt for Pay as You Drive cover?
You can opt for Pay as You Drive when buying car insurance online and offline. While the exact steps may vary from insurer to insurer, here is a general guideline on how to opt for PAYD when buying car insurance online;
- Visit your insurer’s official website and go to “car insurance” section,
- Enter the details of your vehicle, such as registration number, make and model, year of purchase, etc., and get a quote,
- Choose a comprehensive car insurance plan,
- Provide the details of the previous plan (if any),
- Enter your contact details, such as email, phone number, etc.,
- After this, you will be able to pick PAYD,
- Provide additional details as required,
- Pay for the car insurance plan online to complete the process.
Who should opt for Pay as You Drive cover?
The PAYD car insurance is targeted towards individuals who are;Individuals who drive their car occasionally or for shorter distances can get benefits from Pay as You Drive cover. Additionally, seasonal drivers who have usage for their cars depending on the season can consider purchasing PAYD.
- Frequent public transport users:
Most Indian individuals have jobs away from their homes and are daily commuters on public transport. In their case, using a car to drive to their job and back home is not economically feasible. For such individuals, the car comes in handy at weekends, on other holidays or during special occasions, which leads to it being rarely used. They can get great benefits with PAYD car insurance, which is not only pocket-friendly but offers great coverage for the price and usage.
- Owners of multiple vehicles:
Individuals who own multiple vehicles often find themselves using one vehicle significantly less than the other/others. But that doesn’t mean they can avoid getting car insurance for the four-wheeler that is less used as it is a mandatory requirement in India. In such cases, getting PAYD car insurance becomes a reasonable option, as it lets you pay less if you drive less.
This sums up everything you need to know about Pay as You Drive car insurance in India. While the benefits and terms and conditions may vary across insurers, in basic terms, it enables policyholders to pay less if they are driving their vehicles rarely. It not only helps save money on premiums but also promotes safe driving and leaves a good impact on the environment.
(Disclaimer: The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content.For more details, please refer to the policy wordings and prospectus before concluding the sales.)
