Homepersonal finance News

    Now, pay premium as you drive with these motor insurance companies

    Now, pay premium as you drive with these motor insurance companies

    Now, pay premium as you drive with these motor insurance companies
    Profile image

    By Anshul   IST (Updated)


    The ‘pay-as-you-drive’, allows customers to pay the premium depending on how many kilometers the car has traveled instead of the run of the mill full year.

    The usage-based motor insurance, popularly known as ‘pay-as-you-drive’, allows customers to pay the premium depending on how many kilometers the car has traveled instead of the run of the mill full year. Under this insurance scheme, a customer pre-declares vehicle usage for a period of one year.
    Over the past few weeks, several insurance companies have started offering pay-as-you-drive insurance. For drivers who aren’t constantly on the road, these plans can offer an opportunity to reduce car insurance costs, say insurance experts.
    (Also read:
    “With the introduction of pay-as-you-use, motor insurance will evolve to become much more responsive to the needs of the customers. This model undoubtedly enhances insurance penetration in the overall sector by bringing more and more vehicles under the insurance umbrella,” says Sajja Praveen Chowdary, Head-Motor Insurance, Policybazaar.
    Here are some of the motor insurance companies that are currently offering 'pay-as-you-drive' option, as per Policybazaar:
    Edelweiss General Insurance (EGI)
    The Edelweiss General Insurance’s (EGI) - Edelweiss SWITCH is a driver-based motor insurance policy that allows vehicle owners to switch their motor insurance ON and OFF based on usage. It also covers multiple vehicles under a single policy as it is a floater policy.
    The premium for Edelweiss SWITCH can be calculated on the age and experience of the driver. The policy offers significant cost savings and convenience to customers, as they may pay the premium only on the days they use the vehicle as per the pay-as-you-use model.
    However, accidental damage claim may be admitted under the policy only when it is switched on while cover against fire and theft is provided 24/7/365 as these incidents can happen even if the vehicle is not being driven.
    Bharti AXA General Insurance
    Bharti AXA General Insurance offers usage-based motor insurance policies for private car owners under IRDAI's Sandbox project. The ‘pay-as-you-drive’ insurance product will be a combination of both - comprehensive own damage (OD) and third-party (TP) policy wherein the TP premium will be decided as per the IRDAI norms while the comprehensive OD premium will be calculated basis how many kilometres one intends to drive the car in a given time period.
    Currently, the insurer has come up with three slabs, that are 2,500 km, 5,000 km and 7,500 km under this motor insurance policy.
    However, customers who think they might drive their car beyond 2,500 km or 5,000 km will have the option of moving to a higher slab in the middle of the tenure or even move to a regular motor insurance policy that provides coverage for unlimited kilometres. The additional derived premium in both the circumstances will be payable by the customer.
    In case the customer exceeds the kilometre up to which the motor insurance policy is bought, the TP insurance cover will still remain active while there would be no coverage provided for OD cover in case of a claim. Only third party claims arising during the policy tenure would be treated as per the existing liability claims practice.
    TATA AIG General Insurance 
    TATA AIG General Insurance offers a device named as ‘AutoSafe’ which helps policyholders to save on premiums by selecting the kilometers driven. Available on all policies offering personal accidental cover to the tune of Rs 15 lakh for owner and driver, this app also tracks distance traveled by the vehicle, live speed and other driving pattern parameters and offers bonus kilometers for good driving behavior at the time of the renewal, thus, promoting safe driving habits.
    This policy includes other value-added propositions like depreciation reimbursement, daily allowance, no claim bonus protection cover etc.
    Policyholders can choose between 2,500 km, 5,000 km, 7500 km, 10,000 km, 15,000 km and 20,000 km. Customers having exhausted all the km within the policy period can buy additional km by opting for the top-up km option. They can choose between 500 km, 1000 km and 1,500 km.
    (Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions)
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All