Insurance companies launch new products to meet the evolving requirements of the users. One such new product is Pay-As You-Drive Insurance – but what is it? This blog will discuss in detail Pay As You Go driving insurance and who should opt for it.
What is Pay As You Drive Car Insurance?
Pay As You Drive is a type of car insurance add-on cover that allows you to reduce the insurance premium of the Own Damage component. The Pay As You Go driving insurance premium depends on the number of kilometres covered by the insured four-wheeler during the policy period.
As a policyholder, you will be able to save money on the premium depending on the usage of the four-wheeler during the policy period. In simple words, you can also call this car insurance plan- “car insurance where you pay for what you drive”.
Who Should Opt For Pay As You Go Driving Insurance?
Individuals On a Work From Home Schedule
Working from home results in a parked four-wheeler. Maybe your four-wheeler is just for weekends out when, on most days, you are working from home. In this case, Pay As You Go driving insurance is your best fit.
Multiple Vehicle Owners
Pay As You Go insurance for young drivers is great for those who own a bike and a car but end up using the bike more often. Usually, young drivers prefer driving a bike over cars so if you are one of them and use your car for special occasions pay as you drive insurance can be a great fit for you.
Public Transport Lovers
Public transport is very popular as commutes can be a hassle. If you prefer taking the train, cab or auto despite having a car, Pay As You Go driving insurance is perfect for you.
Retired Individuals
Retirees who have swapped their daily commutes for leisurely car drives can now benefit from their reduced mileage with this car insurance add-on.
How Does Car Insurance With Pay For What You Drive Work?
Pay As You Go driving insurance works a little differently than other car policies like comprehensive or third-party car insurance. The following pointers will explain the workings of cheap Pay As You Go car insurance plans-
Declaring Four-Wheeler Usage
You must declare the number of kilometres the insured four-wheeler will cover in the policy period. The Pay As You Go driving insurance policy’s premium is based on the number of kilometres the insured four-wheeler has driven.
In simple terms, you make an informed decision about how much distance you will travel in the insured four-wheeler and pay the premium.
Provide The Odometer Reading
Suppose you have declared that the four-wheeler will be driven for 10,000 km within a year. In that case, you need to provide proof of it during the insurance policy renewal date by disclosing the odometer reading to the insurance provider.
Based on the distance driven, you will receive the policy benefit.
Claim Process
If you raise an insurance claim against the policy, the four-wheeler should be within the declared distance. For example, if you had opted for 10,000 km, then the four-wheeler should not exceed that limit while raising an insurance claim.
Conclusion
Pay as you drive car insurance is perfect for occasional drivers that don’t use their cars as often. For example, if you primarily use public transport, work from home, are a retiree or own multiple vehicles, pay as you go driving insurance can help you save a lot of money on car insurance premium payments.
Also Read: How to Get TATA AIG Car Insurance in Minutes? A Step-by-Step Guide
