Pay as You Drive – New Car Insurance Scheme that Easily Impressed

There is no denying the fact that Insurance is a must if you own a car. It is one of the significant steps in the process of buying a car. However, some people do not use their cars very often, and hence they consider paying for Insurance as an unnecessary burden. But, here is a piece of good news for them! Insurance companies have introduced a new insurance scheme that provides relief to such car owners who occasionally drive. The new insurance policy is called "Pay as you Drive." Like the name suggests, the scheme is all about charging premiums based on the usage and mileage of the car. Keep reading as we decode the new way of buying car insurance while reducing the overall costs. What is Pay as You Drive Insurance? Some people don't use their cars much. The reasons can vary, but the urge to not pay car insurance premiums is pretty standard. To provide a solution, many insurance companies have now introduced the Pay as You Drive insurance policy. This plan is entirely based on car usage and has been sanctioned this year by the IRDAI. The premium will be charged according to the kilometres travelled by car. It is both comprehensive own damage policy and the third party policy, where the IRDAI fixes the latter's premium. The insurance companies provide slabs based on the usage. The users can choose the piece accordingly to decide on the premiums. This gives freedom to people who drive less and accounts for saving more than any regular car insurance policy. How Does Pay as You Drive Work? As the name suggests, the policy is entirely based on the distance traveled, hence the insurance company requires you to choose the ideal slab of kilometers in which your daily car travel fits in to provide coverage. The insurance companies can provide varied slabs mentioning the kilometers, such as 2000 km, 5000 km, or 7500 km. Users can select the ideal piece based on their usage. These slabs vary with every other insurance provider. In case you forget to keep an idea about the kilometers traveled, a telematic device is installed in the car that alerts the policyholder about the balance. The device mentors the distance covered by the vehicle and is generally provided by the insurance company without any additional cost. The telematics device can also monitor the condition of the car and driving habits. This is a significant factor in deciding the amount for premiums. The device alerts the policyholder once the car has traveled the specified distance. The policyholder can either wait to renew the policy after the tenure gets over or can upgrade the slab chosen. Let's talk about some integral features of the policy: Part of the sandbox project of IRDAI, the policy tenure is one year. Since the premiums are decided upon the car's distance, the amount is much less compared to the premiums paid in regular car insurance. The bonus is calculated by adding the third-party premium, which is decided by the IRDAI and own damage premium. Benefits of Choosing Pay as You Drive Insurance Since the world is going through a pandemic, social distancing has become the new trend of the new normal. Most of the offices have emptied on the leased commercial spaces and have allowed their employees to work from home. The surge in the number of people working from home has reduced much traffic on roads. People are not driving much, and hence this new policy can benefit them with the reduction in premium costs. Also, there are places, small towns, where people own cars for traveling to distant places, but don't drive their vehicle regularly, but pay a hefty amount in the name of Insurance. This plan will benefit these people by saving them a lot of money. Lower Premium – Since the policyholder is free to choose the slabs, his usage can lead to comparatively low premiums than premiums paid in the regular car insurance policies. Free Telematics Device – The device comes with the insurance policy, with no additional cost. The device is installed in the car, and it monitors the car condition along with the driver's driving techniques. It follows the distance traveled by car and alerts the policyholder of the remaining balance. Customizable – the policy is customizable, which means the policyholder can choose the ideal slabs and can upgrade to another slab anytime as per his requirements. Who should buy Pay as you Drive Insurance? The plan is ideal for people who have purchased the car for distant travel only. It is perfect for people who use public transport while commuting. It is ideal for people who own multiple vehicles that don't get equally. How to buy Pay as you drive Insurance? Select the option of buying car insurance. Go through the available slab options and choose according to your car usage in a year. Provide the details of the car's odometer. Provide the other required information. Fill up the consent form. Browse through the insurer's add-on covers and select the one you want to include in your policy. The premium will be calculated and displayed on the screen. Pay for the premium online. Drive insurance will be issued to you. What happens if the declared card usage limit is exhausted? Insurance companies that provide the Pay as you drive plan have developed a telematics device to monitor the kilometers covered by the car. This device, when installed in the vehicle, alerts the policyholder about the usage. In case the usage limit gets exhausted, the insurance company provides you with the option to upgrade to a higher slab, and the premiums are adjusted henceforth. You can switch back to the preferred slab anytime once the tenure gets over. Insurance companies that offer Pay as you Drive Insurance The innovative policy is new in the market, but given the conditions out there, it is sure to gather immense popularity amidst the users. However, the Pay as you drive policy is still in the evolving phase. This will go through several changes and modifications shortly. This is why there are only a few insurance companies who have been a go-ahead by IRDAI to offer the plan to the customers. Some of the insurers that provide the Pay as you drive Insurance are: Edelweiss SWITCH by Edelweiss General Insurance Bharti AXA Pay-as-you-drive by Bharti AXA General Insurance ICICI Lombard General Insurance