Pay Motor Insurance Based On Total Kms Driven: This Is How Pay As You Go Insurance Works!
Bharti AXA General Insurance on April 29 announced its partnership with PolicyBazaar.com to sell usage-based Motor Insurance policies for private car owners under Insurance Regulatory and Development Authority of India’s (IRDAI) Sandbox project.
Read to find out more…
What is this Motor Insurance Policy?
Bharti AXA General Insurance was shortlisted by the IRDAI for Usage-based Motor Insurance in the non-life category and Short-term Health Insurance in the health segment under its regulatory sandbox project.
‘Pay As You Drive’ usage-based Motor Insurance allows the policyholders to pay the premium depending on kilometers driven.
According to a press release from the insurer, under this product, a customer pre-declares vehicle usage for a period of one year. The insurance premium will be calculated dynamically as per the pre-declared distance in km.
The customer can choose from three slabs – 2500 km, 5000 km and 7500 km – as per his/her usage need.
Sanjeev Srinivasan, MD and CEO, Bharti AXA General Insurance said that the customer has the flexibility to move to a higher slab in the middle of the period of the policy or make a transition to a standard motor own-damage cover, in case of driving beyond the pre-declared kilometres.
In addition he said, “The additional derived premium for both cases will be recovered from the customer. Even if the policy is not renewed in case of breach of kilometers, the liability coverage of the policy would be still valid for the entire duration of the policy. Further, any third party claim arising during the policy tenure would be treated as per existing liability claims practice.”
How Can a Customer Purchase ‘Pay As You Drive’?
- The customer needs to select the plan as per the usage pattern from the three available slabs.
- They need to provide odometer reading, KYC details, and customer consent form, as per regulatory requirement.
- Own Damage (OD) premium will be calculated post factoring the premium benefit as per pre-declared slab. The issued policy will have all the coverage under standard motor OD cover for the tenure of one year.
Why Should You Buy This Product?
As car usage is highly varied across users, this product benefits those who drive less.
The ‘Pay As You Drive’ is also ideal for those customers who have multiple vehicles and may not use each vehicle as much; therefore, they may not have to pay a large premium amount. It is also useful for those who commute daily via public transport or frequently travel beyond city limits and rarely use their personal vehicle.