Pay As You Drive Car Insurance

Owning a car gives you the flexibility to get around quickly and efficiently. However, not everyone uses their cars daily. If you prefer to cycle to work, use public transport, or work from home, it can seem inconvenient to pay the same car insurance premium as someone who drives their car every day.

But, what if we told you there’s a cost-effective alternative? PAYD or Pay As You Drive insurance plans. They allow occasional drivers like you to save significantly on your premium payments. Let’s understand how.

What Is A Pay As You Drive Insurance Plan?

Regular car insurance plans typically have a fixed premium that you must pay whether you drive your vehicle or not. Pay as You Drive (PAYD) insurance allows you to pay premiums based on how much you drive.

Different insurers use odometer reading or car’s inbuilt telematic devices to track distance driven, as distance is the only crucial factor for deciding premium in case of PAYD as of now. So, if you drive less frequently, you would pay less for insurance. 

Depending on the insurer’s policy, they might offer different slabs based on the kilometers driven, for example, 2500 km, 5000 km, 7500 km, etc. Now, if you’ve opted for the 5,000 km slab, your car should not have exceeded this limit at the time of making the claim. In case you do exceed this limit, you can buy additional kilometers during the policy tenure.

With this plan, you can save up to 10-25% compared to standard car insurance plans.

Features and Benefits

There are many pay as you drive insurance plan benefits that make it appealing to car owners. These include: 

• Lower premiums :

One of the standout features of pay as you go insurance is its ability to offer lower premiums compared to traditional insurance plans. This is because the cost is directly linked to your driving habits. This means the less you drive, the less you pay. 

This pay as you drive insurance plan benefit is appealing for occasional drivers, as it ensures they are not overpaying. 

• Customisation :

PAYD cover can be customized to meet the individual needs of drivers. With pay as you go insurance, you can opt for add-on covers to create a comprehensive plan that compliments your lifestyle.  

• Flexibility :

Another major pay as you drive insurance plan benefit is the flexibility it offers. You can easily adjust your coverage as your driving habits change. This ensures you are not underinsured or overpaying for your insurance plan. 

• Tenure :

The tenure of a pay as you go insurance plan is designed to meet the fluctuating driving needs of policyholders. Unlike traditional insurance policies that come with a fixed term, PAYD plans offer the flexibility to adjust your insurance coverage as your driving patterns change over time. 

How Does It Work ?

Here’s how the pay as you drive insurance plan works: 

1. Declare usage: You must declare your vehicle’s estimated annual mileage to your insurance provider. This helps determine the base rate of your PAYD cover and lets the insurer tailor the premium to your driving habits. 
2. Odometer reading: Regularly report your car’s odometer readings to your insurer to validate your usage. This step is essential for validating the actual usage of your vehicle. 
3. Discount on premiums: Enjoy reduced premiums if your actual driving is less than the estimated usage. This is how much you can save : 

4. Claim process: In case of an incident, file a claim as usual. Notify the insurance provider of the incident, provide necessary documents, and follow their guidance for assessment and repair.

Who Should Apply For PAYD Insurance?

You should consider a pay as you drive insurance plan if you belong to any of the categories below:

• Seasonal drivers: Benefit from PAYD cover during active months without paying full-year premiums. For example, imagine you use your vehicle only in the summer for vacation trips, and you barely use it for the rest of the year. In this case, with PAYD, you would only pay premiums for the summer months and not for the full year. 
• Owners of multiple cars: Pay for insurance based on the use of each vehicle, not a flat rate for all. 
• Individuals using public transport more often: Save money by only paying for the occasional use rather than full-time coverage.

Key Takeaways 

If you’re tired of high car insurance premiums for a car that spends more time in your garage than on the road, it’s time to consider a pay as you drive insurance plan. Save on car insurance premiums while enjoying complete coverage. Additionally, consider platforms like PhonePe for a seamless and hassle-free insurance purchase experience!