Motor Vehicle Insurance is one of the primary and most essential amenities that one must have bought while purchasing a new vehicle. Also, it is not just a one-time investment, and one has to sporadically pay the premium to the insurance company so that their insurance remains legitimate. But what if we tell you that you don't have to pay innumerable premiums forcefully, and you only have to pay for what you drive. Sounds crazy? But, yes, now it's possible. India's Insurance Regulatory and Development Authority has approved some companies to sell this unique 'Pay As You Drive' Insurance Policy. So, here are all the details about it and also should you buy one?
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For new learners, let us first tell you about the use of vehicle insurance. Its primary use is to provide financial protection against physical damage or any bodily injury resulting from traffic collisions. It also acts against a liability that could arise from incidents in a vehicle. Now, let us discuss what is this Pay as you drive insurance policy. So, the apex body of the Indian government that looks into these matters, The Insurance Regulatory and Development Authority of India, has permitted some companies to sell usage-based motor vehicle insurance.
In the first phase, IRDAI has approved just a handful of insurance companies, such as Bharti Axa General, Go Digit, TATA AIG, ICICI Lombard, etc., to sell motor vehicle insurance policies. Under this insurance scheme, a customer will have to pre-declare vehicle usage for one year. Correspondingly, the insurance premium will be calculated dynamically per the pre-declared distance in kilometres. As per their running and need, the customer can choose anyone from the given three slabs - 2500 km, 5000 km, and 7500kms.
Commenting on the same, Mr. Sanjeev Srinivasan, Managing Director, and CEO of Bharti AXA General Insurance said, "We are very happy to join hands with PolicyBazaar.com to distribute 'Pay As You Drive' motor insurance policies under the Sandbox project. The emerging culture of shared mobility and work from home makes the usage-based motor insurance a very pertinent product for car owners, where they can pay the premium as per the usage of the car. We believe the partnership for 'Pay As You Drive' will help us offer the need-driven motor insurance to the car owners more seamlessly and make the customer-centric insurance a reality."
Now, if we discuss where one can buy it and whether one should believe it or not? So, if you want to purchase this usage-based insurance policy, it can be bought from online insurance aggregators like PolicyBazaar.com, agents and other distribution channels. To buy the policy online, one has to provide the odometer reading, Know Your Customer (KYC) details and fill up a consumer consent form.
This Pay as you Drive Insurance policy can be an ideal choice for those customers who have multiple vehicles and may not use each car as much as they do their primary mode of mobility. Also, if you mainly depend on public transport like buses/metro/local rails, etc., and use your vehicle very rarely, likely once or twice a week or only for long highway runs. This usage-based insurance can be an excellent pick for you. You will not have to pay a significant premium amount and thereby utilise the saved amount of money in some other productive tasks.
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What are your thoughts on this Pay as you Drive Insurance Policy? Do share with us in the comments below.
