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Pay As You Drive Insurance

Add-on that ensures you pay less if you drive less!

Understanding Pay As You Drive Insurance

With the increase in the number of road mishaps and poor driving conditions in India, obtaining a four-wheeler insurance has become the need of the hour. Although the IRDAI (Insurance Regulatory and Development Authority of India) mandates third-party coverage, this plan won't provide any financial protection for damage sustained by your insured vehicle. That is why most car owners opt for comprehensive insurance. But is paying a hefty premium feasible when you hardly use your personal car? Perhaps not. So, what is the alternative? The answer is pay-as-you-go car insurance (aka Pay As You Drive).

Pay As You Go Model

Pay-as-drive car insurance is a usage-based insurance product. It lets you customise your insurance premium based on actual vehicle usage. That means you only pay the premium for car insurance based on kilometres driven (i.e., the distance you intend to drive) in a policy year.

A Pay As You Go (aka Pay As You Use or Pay As You Drive) car insurance is basically a package car insurance with Pay As You Go/Pay As You Use add-on. This policy is built to give the customer more control over their car insurance costs. You can opt for a set plan (for example: 5000 or 7500 km/year plan) depending on your driving needs and the kilometres you plan to cover in that particular policy year.

Features of Pay-As-You-Go Car Insurance

The significant features of this car insurance by kilometres driven coverage are:

Claim Benefits

Covering a shorter distance can earn you discounts on the own damage component of your premium at renewal.

Affordable Premiums

Since the premium depends on the miles covered, the cost is much lower than that of a comprehensive package policy, where the premium is determined by factors such as the car’s make and model, registration date, and other factors instead of miles driven.

Customisable

Whenever you plan a long road trip and expect to exceed the available mileage credit, you can top up your kilometres with just a few taps on your smartphone.

Tenure

Generally, this coverage is valid for one year.

Add-ons

To expand your pay-as-you-drive coverage, consider optional covers like roadside assistance, zero depreciation coverage, and engine protection coverage

Renewal Benefit

If you have not filed any claims for repairs or replacements during the policy term, you can earn a No Claim Bonus (NCB) discount. This discount can help reduce your premiums when renewing your policy.

How Does Pay As You Drive Insurance Work?

Let’s look at how this insurance policy works —

1

Declaration:

Review your driving requirements and inform your insurer of the mileage your car will cover within the policy period.
2

Provide Odometer reading:

Check the odometer located on the car’s dashboard. Record a short clip showing the kilometres your vehicle has covered to date.
3

No telematics:

You don't need to install any telematics device or link it to your smartphone to show your driving statistics. Currently, this coverage is based on the kilometres to be covered, not on the driving behaviour of the car owner/driver.
4

Premium Discount:

Once you qualify for this plan, you receive a certain discount on the car's own damage premium insurance based on your insurer’s terms and conditions.
5

Claim Settlement:

In the event of a road mishap damaging your car, the claim settlement process is simple and similar to standard four-wheeler insurance, provided the claim is within the specified kilometre limit.

Who Should Buy Pay-As-You-Drive Insurance?

You may opt for this cover if you drive your car occasionally, say twice or thrice a month.
Opting for this coverage makes sense if you own multiple cars but do not use them all equally.
This cover is ideal if you prefer travelling by public transportation and use your four-wheeler rarely.
If you work in a different city and only visit your hometown once every month, the car you leave at your hometown might only need a pay-as-you-drive cover.

How to Buy Pay as You Drive Insurance?

If you wish to purchase pay-as-you-go-driving insurance coverage from ICICI Lombard, follow these steps —

Step 1: Visit our official website and navigate to the car insurance section.
Step 2: Provide the car details to be insured and click on the ‘Submit’ button to get a free quote.
Step 3: Select the pay-as-you-drive plan and provide additional details about your vehicle.
Step 4: Pay the premium, and the coverage details will be sent to the email address you have provided.

What happens if the Declared Car Usage Limit is exhausted?

If the declared limit under drive less pay less car insurance is utilised before the expiration of the policy period, you can top it up anytime by paying an additional premium. However, if you have not restored the limit and your car meets with an accident during that period, you are required to share the repair and maintenance expenses under the co-payment clause.

Things to Keep in Mind Before Purchasing Pay-as-You Go Motor Insurance Cover

Research various insurers to understand their coverage and discounts before finalising one.
Refer to the policy wording to learn the scenarios where your claim may not be approved. Also, review the list of covered incidents.
Ensure all the information you provide is accurate. Incorrect information can result in a claim rejection.
Choose the kilometre slab wisely to avoid paying additional premiums for top-ups.
Provide clear images/videos of the odometer, along with images showing the vehicle and chassis numbers.

FAQs on Pay As You Drive (PAYD)

Is pay-as-you-drive worth the investment?

Yes, PAYD insurance provides holistic coverage and is recommended to those who do not use their car often and are on a tight budget.

How is comprehensive car insurance different from pay-as-you-go motor insurance?

The comprehensive four-wheeler insurance requires you to pay a fixed premium regardless of how much you use your car. The premium for comprehensive cover relies on the vehicle's age, make & model, and registration place. On the other hand, pay-as-you-drive has a variable premium, which is determined by the number of kilometres you intend to drive during the policy period.

What documents are required to opt for pay-as-you-drive insurance?

You can purchase this PAYD cover by submitting a copy of your identity and address proof, your car's registration number, and documents supporting any major repairs or replacements of the car's components in the past.

When should I claim my pay as you drive insurance?

You can submit a claim if your vehicle sustains damage due to any covered incident or if your insured vehicle injures someone or damages someone's property.

How do I claim my pay as you drive insurance?

To file your claim, notify your insurer about the incident within the specified timeframe. Include supporting documents like photos of the damaged vehicle, a copy of your policy document, and the FIR (if needed). An assigned surveying officer will assess the damage and process your claim accordingly.

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