By A vehicle provides us flexibility and ease of travelling within and outside the city. However, being used for our convenience, it is essential to protect the vehicle from any risk or uncertainty caused, which can lead to damage. Having motorcycle or car insurance is the best consideration to safeguard our riding assets.
Some people between us don’t ride their car every day, just occasionally. Paying a lot of money into the car insurance policy premium can be tiresome for them. But imagine when you don’t have to pay for those days when you are not riding your car.
Sounds interesting, right? It is now possible with the advancement of technology and flexibility in insurance procedures. This facility is popularly known as pay-as-you-drive insurance. In this article, let us understand more about it, its features and if it is financially worth it.
What is Pay-As-You-Drive-Insurance?
Pay-as-you-drive insurance is an advanced feature of standard insurance. With this facility, instead of paying a flat rate to the insurance provider, premiums are to be paid according to vehicle usage. Pay-as-you-drive is the best fit for someone who uses their vehicle less but still wants to get it insured.
This technique was first launched by New India Assurance (NIA) in July 2022. The concept behind this says that for every kilometre you ride, you must pay the premium accordingly. The mechanism of this insurance works in such a way that the car owner must upload a video of the car’s odometer while purchasing the insurance policy.
Does Pay-As-You-Drive-Insurance Give You a Fair Premium Cost?
If you are looking forward to purchasing pay-as-you-drive insurance, it is important to understand if buying this will be really worth it or not. Let us understand if this helps with a cheap premium cost.
Since pay-as-you-drive insurance is built on the context of paying a premium if you drive, the more you drive, the more will be the premium cost. In contrast, standard or general insurance covers the protection for a while.
So, only if you are driving for fewer kilometres in a year, it is a good option for insurance coverage. The cost of the premium of both insurance can be calculated using an insurance premium calculator on insurance websites like Tata AIG.
There are many options available for cheap car insurance in India as well, which can be chosen as an alternative. It is always important to look at insurance coverage facilities and select the best that suits your needs and goals with the car.
Pay-as-you-go insurance is mandated with the third-party insurance policy. It is similar to a damage insurance facility in which an individual can add to their third-party liability insurance. Some pay-as-you-go insurance providers offer discounts for good riding by calculating the driving score. This facility makes this insurance a preferable choice among today’s users.
Drawbacks of Pay-As-You-Drive Insurance
Pay-as-you-drive car insurance has its advantages, but there are some drawbacks as well. To make an informed decision to buy car insurance of such type, it is essential to know its disadvantages as well.
The following are some drawbacks of the Pay-as -you drive insurance:
Limited Distance
For now, this policy is only available to the person who is riding less than 15,000 km per year. So only if the insured policyholder has driven their vehicle for less than 15,000 kilometres will they be eligible for this insurance type. After crossing 15,000 km, only third-party four-wheeler insurance will stay valid, but the car won’t get the advantage of its damage insurance.
Includes Hassle
The pay-as-you-go insurance works on a telematics system. One has to download an app and start to track the ride of the car whenever driving. It includes a procedure which can be challenging to apply every time. There have been cases where the app doesn’t record the odometer correctly, so that the adjustments can be a struggle at some time.
Not Suitable for Regular Car Users
For car users who frequently ride, this insurance is a little expensive. The premium cost of pay-as-you-go insurance would be more if compared to a standard insurance policy. If the car is used daily, it would be a better choice to prevent hassle and reduce premium costs by choosing a regular four-wheeler insurance policy.
Conclusion
These days, insurance facilities are available in various options. A vehicle owner can choose from a broad category or even customise the insurance as per their choice. Pay-as-you-go insurance is a better choice for those using their vehicle very occasionally.
While buying such insurance, you must ensure that your insurance policy provider is credible. It is important to remember that you read all the terms and conditions before making a purchase.
