Do you own a car but use it occasionally? You can consider covering it under a Pay Per Mile Insurance policy! According to the Motor Vehicles Act of 1988, covering your vehicle under a car insurance policy is mandatory before taking it on the road. However, if you rarely use your car, the premiums of a traditional plan can feel like an unnecessary financial burden. This is when Pay Per Mile Insurance can be a feasible option. This insurance product allows you to pay based on the miles/kilometres you travel, helping you avoid high annual car insurance premiums. However, is Pay Per Mile Car Insurance worth it in India? Let’s find out in this article.
Is Pay Per Mile Car Insurance Worth It In India?
Pay Per Mile Insurance can be an ideal option for those who use their car less often or primarily for short distances. For example, if you work from home, use public transport often, or are living a retired life, you may not use your car often. In such cases, opting for Pay Per Mile car insurance can help you reduce your premium liabilities.
However, before zeroing in on this insurance product, weighing its pros and cons and making a well-thought-out decision is vital.
Pros of Pay Per Mile Car Insurance
The following are the benefits of this insurance product -
Affordability:
Pay Per Mile insurance is affordable when compared to a regular third-party or comprehensive car insurance policy. You only pay for the miles you drive, and this can reduce your policy premiums significantly.
Flexibility:
If you happen to exhaust the chosen miles/kilometres limit, the insurer may allow you to add extra miles for continuous coverage.
Coverage:
Pay Per Mile Insurance provides the same level of coverage as traditional third-party or comprehensive car insurance policies.
Cons of Pay Per Mile Car Insurance
Pay Per Mile insurance has a few drawbacks as well, such as -
Usage tracking:
The insurer may ask you to install a telematics device in your car to track the kilometres. This can raise privacy concerns as the device shares your driving data with the insurance company.
Kilometre slabs:
The policy may have specific kilometre slabs or limits. If you exceed the chosen slab, you will have to pay for the additional kilometres. As a result, the policy premiums or bills may fluctuate.
Conclusion
To sum up, Pay Per Mile insurance is a good option for those who don't use their vehicle frequently. The policy premium depends on the miles/kilometres you select, so you won't have to pay extra unless you exceed the chosen limit. However, before opting for this car insurance policy, it is wise to understand the terms and conditions, evaluate your driving patterns, and compare this policy with traditional car insurance options. With careful consideration, you can select a car insurance policy that best suits your needs and budget.