Benefits of Buying Pay As You Drive Car Insurance Policy
Published On Dec 03, 2020 4:00 PM By InsuranceDekho
What is a ‘pay as you drive’ insurance policy? Should you purchase it? What are its benefits? Read this article to find out.
Many of us have more than one car, others of us also prefer to use public transport or the pandemic has made our jobs work at home, in all these cases though we need our cars we do not use it as often. In such scenarios, it can feel buying regular car insurance is pointless. If this is you, you may want to take a look at a pay-as-you-drive type of car insurance. What is that? In this article, we will tell you everything you need to know about it.
What is ‘Pay As You Drive’ Car Insurance?
‘Pay As You Drive’ is a usage-based car insurance policy where the premium depends on the number of kilometres you have travelled by your car. In this type of insurance, the customer pre-declares the vehicle usage for one year and the car insurance premium is calculated accordingly. There are usually three slabs of 2500km, 5000 km and 7500 km allowing you to choose according to your usage needs.
Should You Buy ‘Pay As You Drive’ Car Insurance?
The pay as you drive scheme may not be for everyone. A mentioned before it works best for people who do not use their car as regularly or use them only for short commutes. This usually included people who have more than one vehicle, use public transport primarily or live in close proximity to their daily commutes. Do remember the ‘Pay As You Drive’ is a comprehensive car insurance , i.e., it provides coverage for both own damage costs as well as third-party car insurance liabilities.
What are the Benefits of Purchasing ‘Pay As You Drive’ Car Insurance?
The following are the benefits of having a usage-based car insurance policy:
Lower Premiums: The premium of the pay as you drive type of policy is on the usage of the car, unlike standard car insurance policies which look at things such as make, model age etc. The premium is placed under three slabs; 2500 km, 500km, and 7500km. As the usage determines the premium, it is much lower since logically, cars that are used less are also less susceptible to mishaps.
Customization: Other than the aspects of the insurance policy such as the obligatory third party cover and the own damages cover it can be moulded to individual needs. Purchasing add-on covers such as Zero Depreciation Cover, Passenger Cover, Engine Cover or Roadside Assistance Cover are available with this type of policy.
Free Telematics Device: If you purchase this type of insurance policy a telematics device that will be installed in your car. This will help you stay on track with your limit but also help you monitor the car’s health and your driving habits.
Floater Coverage: Some car insurance companies also offer a floating policy under the pay as you drive plan. This comes useful to those who have multiple cars by allowing them to purchase a single insurance policy for all their cars.
Third Party Coverage Remains Constant: Even if you exhaust your kilometre limit the third party cover remains constant for the tenure of the insurance policy.
Flexibility: Car usage is not always predictable, hence, in case you cross the kilometre limit you can simply update the policy. Moreover, you can also simply shift to a standard car insurance policy if you are dissatisfied with the current plan.
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In a nutshell, for those who do not use their cars as often having a standard car insurance plan can often feel more like a burden than an added layer of protection and financial stability. This is because standard car insurance plans come with hefty annual premiums. But with a ‘pay as you drive’ policy you are saved from such hassles. Moreover, you can purchase add-on covers, use the cashless garage facilities and buy and renew online just like any other car insurance policy. In most cases, the insurance provider will simply provide you with a telematics device that will help you remain within the kilometre slab you selected for the insurance. Additionally, it can also help you monitor the condition of your car and your driving habits while on the road.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.