How Does Pay as You Drive Car Insurance Work?
If you are worried about higher car insurance premiums, then here is a solution for you! The IRDAI has launched a new scheme where you can pay less premium while availing of proper benefits and a third-party car insurance policy — Pay as You Drive. Here, you have only to pay the premiums as you drive or for the distance covered. Understanding how Pay as You Drive works is very important for your monthly budget and long-term savings. So, here we have discussed a few things on how PAYD insurance works.
What are the Features of PAYD Insurance?
PAYD is a crucial cover available for those who do not drive regularly. It can help them save a huge percentage on their car insurance price. A few features of Pay as You Drive insurance are listed below -
- PAYD offers discounts on the premium depending on the car usage as per the total kilometres covered (as per the terms and conditions of the insurance company).
- To take advantage of this plan, the policyholder must upload a video of their vehicle before their current four-wheeler car insurance policy expires.
- The plan is ideal for those who do not drive frequently
- You can save up to 10% on your damage premium with this plan
If you want to lower the premium, you must avoid fines and accidents due to negligence. For that here’s what you must do -
- Do not drink and drive
- Do not miss to fasten the seatbelt
- Follow traffic rules and signals
- Follow defensive driving techniques
How Does Pay as You Drive Insurance Work?
PAYD is a new auto insurance policy that allows you to tailor your insurance plans and thus lower your premium. A Pay as You Drive car insurance offers the mandatory third-party liability policy for the policy tenure. Moreover, it offers own-damage coverage, but it is based on the distance covered. Therefore, you only pay the premium for the distance you travel. Here’s how PAYD works -
Car Reading
The PAYD policy premium is decided based on the number of kilometres driven by the insured. The number of kilometres is usually decided and depends on the general insurance company.
Odometer Reading
The odometer reading is another important part of the plan. Customers are obliged to declare their vehicle’s odometer reading. To take advantage of the Pay as You Drive plan’s benefits, they can start the process by uploading a video before the policy expires.
May Not Reuire Telematics
Telematics is a gadget that tracks the distance travelled by an insured vehicle as well as various other unknown analytical features. Currently, this plan is based on the customer’s declaration of mileage. So, in many cases, no such equipment is to be placed in the insured vehicle.
Discount of Premium
When a consumer qualifies for the PAYD plan, they can earn a 10% discount on their damage insurance payment.
Claim Settlement Process
In some cases, if the claim is within the defined limit of 15,000 kilometres, the claim settlement process is the same as any other plan. If the stipulated limit is exceeded, policyholders may be asked to pay a portion of the claim amount as a co-payment.
Who Benefits from Pay-as-You Drive Car Insurance?
PAYD is the perfect insurance plan for people who do not use their vehicles much. Apart from this, here are a few more people who should buy Pay as You Drive -
- Those who do not like to drive their car frequently
- Those who want to avoid public transport on certain days
- Those who own multiple vehicles
- Seasonal drivers
Pay as You Drive simply means — usage-based car insurance. But, it should be noted that if you are a regular driver, comprehensive car insurance online is the ideal choice. If you do not drive frequently, you may certainly invest in a usage-based insurance plan as it saves you from paying a high-cost normal car insurance premium.