The premium of car insurance policies is constant in fixed packages. The premium largely depends on the car’s make and model, IDV, type of insurance, and tenure. No matter how often you take your car out of the garage or how many kilometres you drive, the premium remains constant. But this changed dramatically, when the Pay as you Drive cover was introduced on own damage car insurance policies.
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How Does PAYD Car Insurance Work?
If you wish to understand how Pay as you Drive Car Insurance can benefit you, it is essential first to understand how it works. It is slightly different from that of a regular car insurance policy, but there is no difference in the coverage provided. The stark difference you may notice is in the validity of the section – own damage section. The coverage under the own damage section of the policy will be available till the kilometres (as per the plan opted for) are up or the policy end of the date, whichever is the first one.
- Car kilometres declaration – The policyholder needs to declare the number of kilometres the car will be used according to the slab provided by the insurer.
- The premium – Based on the kilometres covered, the appropriate discount on the own damage premium of the base policy.
- Coverage under own damage section – Own damage section of the policy will be available maximum of kilometres as per the plan.
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Features of Pay As You Drive Car Insurance
The features of Pay as you drive are essential to be understood and read before you buy the cover. The features of Pay as You Drive Car Insurance will give you further clarity and insight into how they can apply to you, and you can decide whether it is suitable for your needs.
- The tenure of the policy is one year.
- The own damage premium under the policy is dependent on the usage of the kilometres covered.
- You can get a discount of up to 25% on your own damage insurance premium.
- The policyholder can customise the car insurance cover by opting for add-on covers.
How is the Premium Determined?
The premium for your policy is determined based on which slab you are choosing for the year. The premium for pay as you drive slab would be lesser as compared to comprehensive insurance due to the usage.
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Claim Settlement Under Pay As You Drive
The process for claim and settlement is fairly similar to that of any other car insurance policy. If you wish to know the whole process, here it is.
- Contact the company within 48 hours of the accident or the theft.
- It is essential to have a copy of the FIR filed in case of theft or third party damage.
- Submit the necessary documents to the company as soon as possible.
- The insurance provider will allocate a surveyor to check on the extent of the damages.
- The car will be sent to a garage in the network after proper inspection by the company.
- Cashless service can be availed at the garage, which is chosen from the network.
- In case of theft, the IDV will be disbursed to the policyholder after the police share a non-traceable report.
- Policyholders will be intimated when the application gets accepted.
The own damage claims placed will be checked against the plan purchased and slab validity. Any claim made after the slab has already expired (due to the number of kilometers or due to tenure) will be rejected. The third party claims can be settled according to the terms and conditions of the policy.
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Who Should Opt for Pay As You Drive Insurance?
The concept of pay as you drive was curated to ensure you don’t end up paying a hefty sum for insuring your car. The advantage of pay as you drive insurance is that you get all the benefits of robust car insurance, yet you end up paying less. Here are some instances where this type of insurance add-on is a perfect fit –
- If you are struggling to manage the expenses of 2 cars when only 1 is being used regularly, then buying a pay as you drive for one of the car makes sense.
- If you use your car only for special occasions or on weekends, then it is a good idea to invest in pay as you drive. It ensures you save money rather than spending it on car insurance.
- This plan is perfect for those who commute using public transport on weekdays to avoid traffic and take their car out rarely.
- If you have a constant cycle of using your car and you live in a place with less traffic, this is the perfect kind of car insurance for you.
Pay as you drive is a boon for those who have limited usage of their cars. It can save money, and the concept of paying for what you use can further be developed thanks to this first step.
