Are you concerned about high auto insurance premiums? Do not worry; the Insurance Regulatory and Development Authority of India (IRDAI) has introduced usage-based car insurance. Under this, the insurance premium is calculated based on the number of kilometres driven and the driver’s history.
In general insurance, the IRDAI keeps introducing new policies for the motor insurance segment. The “Pay-as-You-Drive insurance” and “How-You-Drive insurance” are two cost-effective auto insurance policies introduced by the IRDAI. Both policies can be easily bought from any car insurance app. You can, visit the official website of IRDAI for further details.
Pay As You Drive (PAYD) insurance features: This is a substantial coverage option for those who only drive occasionally. It can help them save significant money on their auto insurance premium. It provides a premium reduction based on the total kilometres driven (less than 15,000 KM).
To take advantage of this plan, the policyholder must upload a video of their vehicle before their current motor insurance policy expires.
A PAYD motor insurance policy includes the mandatory third-party liability policy for the duration of the policy. Furthermore, it provides own-damage coverage only up to a certain distance. As a result, the policyholder only pays the premium for the distance travelled. * Standard T&C Apply
If you’re using an app for bike insurance, then please note that PAYD is available for two-wheelers too.
PAYD works as under:
- Declare vehicle use: The premium for a PAYD policy is determined by the number of KMS driven by the insured. Currently, the annual mileage is set at 15,000 KMS. As a result, if the insured drives less than 15,000 KMS per year, they may be eligible for this plan.
- Odometer reading: The odometer reading is another important aspect of the plan. Customers are required to declare their vehicle’s odometer reading. To take advantage of the plan’s benefits, they can start the process by uploading a video before the policy expires.
- Telematics is not required: Telematics is a device that tracks the distance travelled by an insured vehicle as well as several other unknown analytical features. Currently, this plan is based on the customer’s declaration of KMS. As a result, no such device to calculate distance is installed in the insured vehicle.
- Savings on premium: Customers who qualify for the PAYD plan can receive a 10% savings on their own-damage insurance premium.
- Claim settlement process: Suppose the claim is within the specified limit of 15,000 KMS. In that case, the claim settlement process is the same as any other plan. However, the policyholder may be required to pay a portion of the claim amount if the set limit is exceeded.
* Standard T&C Apply
Pay How You Drive (PHYD) insurance features: The IRDAI recently launched ‘Pay How You Drive Insurance’ to revolutionise the industry. Under this, an insurer can now charge a premium based on the policyholder’s driving habits.
This means a car owner or driver must be more cautious while driving to reduce their premium. The main objective of this plan is to promote safe driving habits.
Here are a few things that all drivers should keep in mind to reduce their premiums:
- Following traffic signals
- Avoid drink and drive
- Follow speed limits
- Wearing a seatbelt at all times
- Drive safe
* Standard T&C Apply
However, this is verified using the GPS tracker installed in the insured vehicle. Furthermore, the premium is calculated for each driver using backend algorithms.
Conclusion: The PAYD and PHYD insurance plans ensure that all customers have a positive experience. You may purchase either of the two options conveniently using any car insurance app.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.