How much and how safely you drive could soon affect how much you pay for auto insurance. IRDAI allows insurers to offer pay-as-you-drive four-wheeler insurance plans with premiums based on mileage and driving style.
Pay-as-you-drive insurance plans let customers limit the number of miles their car can be driven while also giving them concessions on the standard rate. The concession off the standard premium is greater the lower the limit. Only the limit that the buyer chooses for themselves will be covered by the insurance.
Concessions are another option that insurance companies may present. A telematics device is set up in the car to track both the user’s driving behaviour and the condition of the vehicle.
What Is The Meaning Of Pay As You Go And Pay How You Go?
Four-wheeler insurance companies can develop plans that are based on how the vehicles are used thanks to the pay-as-you-drive concept. Hence, infrequent drivers enjoy lower premiums, while reckless and fast drivers face higher premiums due to increased risk.
The policy’s duration would be limited to a certain number of kms. As they are likely to pay lower rates, this is done with the aim of helping people who use their vehicles less frequently.
The pay-how-you-drive model will base premiums on driving behaviour and car condition. Secondary advantages include safer driving conditions and reduced pollution as a result of healthy vehicles.
Is The Plan Appealing?
For those who own many vehicles or have not been driving as much owing to Covid limitations, these improvements appear to be excellent news. If they don’t use their cars too frequently, they won’t have to pay the entire price. “Introducing these options will help offer motor ‘own damage’ cover in the country a much-needed fillip and increase its penetration,” IRDAI said in a statement.
The premium reductions, however, are not particularly intriguing. The necessary third-party premium and other add-on covers are unaffected, and the concession only applies to the “own damage” premium.
Before choosing a policy with a low slab, take that into account.
The good news is that customers who drive more than the slab restriction can upgrade to a higher slab or even a conventional unlimited policy. However, this update needs to be completed immediately. Upgrades are not available following an accident or claim incident.
Ensure that you renew your car insurance on time.
A car insurance calculator is a convenient tool you may utilise online to check the amount of coverage required based on your needs.
The decision to purchase a car insurance policy based on distance and driving style depends on individual preferences, driving habits, and the potential benefits of such policies. These innovative pay-as-you-drive plans offer a more personalised and potentially cost-effective approach to insurance, catering to those who drive less and safely. However, consumers should carefully evaluate their driving patterns and insurance needs before opting for such policies to determine if they align with their financial and coverage requirements.
Standard T&C Apply
All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
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.