In India, car insurance has historically been standardised. You were required to have third-party automobile insurance at the very least, even if you only drove your car once a month or fewer. Up until recently, own-damage car insurance cost a lot more if it was added to your other policies. No distinction was made between heavy and light car users. However, during the past few years, car insurance policies have improved in terms of customer service.
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Car owners now have the ability to customise their auto insurance, particularly their own-damage coverage, to match their driving style. The amount of danger varies from person to person depending on how frequently they drive and how safely they drive, therefore ultimately you need an insurance policy to cover the risk. The “Pay As You Drive” car insurance coverage is an example of a custom-made strategy. Let’s understand all about “Pay As You Drive”.
What is ‘Pay As You Drive’?
‘Pay As You Drive’ insurance package is a comprehensive own damage (OD)+third party (TP) coverage, where the comprehensive own damage premium is determined based on how many kilometres you intend to travel in a specific period of time, while the third party premium is determined based on the rules. It is typically offered as an add-on cover by insurance companies.
‘Pay As You Drive’ policies come in two basic varieties: one is based on the number of kilometres driven, and the other is based on the number of days the insurance policy is in effect.
Switch On/Off motor insurance is another form of the “Pay As You Drive” policy that allows you to activate your own-damage coverage while driving and deactivate it while not using your vehicle. When you’re not driving, you can disable your own-damage coverage using the Kotak Metre (Switch On/Off). You will receive one bonus day as compensation for each consecutive 24-hour period during which your own damage cover is inactive.
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How much will you save from ‘Pay As You Drive’?
‘Pay As You Drive’ insurance can save 5-20% over a general car insurance plan. The exact number of savings will depend on various factors such as car model, age and registrations. The own-damage premium for a five-year-old Maruti Swift can save up to 20%.
