Paying higher premiums for a comprehensive car insurance policy may seem unfair, especially if you only drive once in a while. This is where a Pay As You Drive policy emerges as a great alternative.
Pay-As-You-Drive insurance is usage-based car insurance coverage that allows you to pay only for the number of kilometres your vehicle travels. It is a cost-effective insurance solution for occasional drivers who don’t drive very often.
Besides customisability and affordability, many other Pay-As-You-Drive insurance benefits still need to be explored. Here is a detailed blog about the key benefits of a Pay-As-You-Drive Policy.
How Does Pay-As-You-Drive Car Insurance Work?
Declare Your Odometer Reading
First, we take your odometer reading to track the approximate number of kilometres you drive over a period.
Select Your Kilometre Limit
Next, you can select a kilometre limit based on your coverage. As mentioned above, the minimum value is 2,500 kilometres. You can add the desired number of kilometres in multiples of 1,000.
Enjoy Coverage
That’s it. Customise and buy your plan and enjoy coverage. In the event of an unforeseen incident, raise your claim and get reimbursed as per your policy terms and conditions.
A Pay-As-You-Drive policy works in three simple steps. First, you declare your odometer reading to specify the number of kilometres you drive over a certain period. This reading serves as a basis for your plan. Next, you need to select the number of kilometres for which you need the coverage.
Our Reliance Limit Sure cover comes with a minimum limit of 2,500 kilometres per year. Based on your needs, you can add the required kilometres in multiples of 1,000. And that’s all you need to purchase our Reliance Limit Sure Policy.
Finally, in the event of an unforeseen event during the policy year, you can lodge a claim and get financial coverage for your losses.
Key Features of Pay-As-You-Drive Car Insurance
Feature |
Details |
Type of Coverage | Our PAYD insurance offers own damage coverage for the total number of kilometres you have selected. Note that it does not come with third-party coverage. |
Number of Kilometres | The minimum distance limit for our Pay As You Drive insurance coverage is 2,500 kilometres. You can add any number of extra kilometres in the multiples of 1,000. |
Top Up Limit | If you end up exhausting your selected kilometres, you can top up your limit at an additional cost. |
Grace Kilometres | It is one of the most highlighting features of Reliance Limit Sure. We offer a grace limit of 125 kilometres, with which you can enjoy free coverage after your kilometres are exhausted. |
Carry Forward Limit | No need to worry about your unused kilometres. Those will be added to your policy next year. |
Top 5 Pay-As-You-Drive Insurance Benefits
Cost-effective Premiums
One of the primary Pay-As-You-Drive insurance benefits is that it allows you to save on your insurance premiums. Instead of paying for the entire policy tenure, you only pay for the number of kilometres you have driven your car.
Customisable Plans
Another benefit of Pay As You Drive cover is that you can customise your coverage according to your requirements. For starters, you can choose the driving distance you will cover.
With the Reliance Limit Sure policy, you can enjoy insurance for as low as 2,500 kilometres and keep increasing in multiples of 1,000. It goes without saying that you only have to pay for the number of kilometres you have selected.
Carry Forward Unused Kilometres
Reliance General allows you to carry forward the remaining or unused kilometres to the next year.
Suppose your selected driving distance is 10,000 kilometres during the policy year.
However, you have only driven 8,000 kilometres during the tenure. In this scenario, the unused 2,000 kilometres will be added to your next PAYD policy tenure.
Buy More Kilometres
Selecting a fixed driving distance doesn’t mean you can not drive your vehicle beyond this limit. If you have exhausted your selected limit, you can always buy more kilometres based on your requirements.
Easy Claims Procedure
Pay-As-You-Drive insurance cover offers a similar and simpler claims settlement procedure. This means you can raise a claim and get it settled in the same way as a standard car insurance policy.
Promotes Better Driving
Above all, a PAYD insurance plan encourages drivers to drive safely and prioritises vehicle maintenance via several rewards and discounts for responsible driving.
Who Should Buy Pay-As-You-Drive Insurance Coverage?
Pay-As-You-Drive insurance is a smart way to save money on car insurance for the following category of drivers:
Occasional Drivers
Among the biggest prospects of PAYD insurance are occasional or seasonal drivers who don’t drive their vehicles very often. If you belong to this category of drivers, then a Pay As You Drive insurance plan is an excellent solution for you.
With this policy, you don’t have to pay hefty premiums when your car is parked in the garage. You only pay for the number of miles you have crossed.
Senior Citizens
Senior citizens tend to drive their vehicles less, making them excellent prospects for Pay As You Drive car insurance.
If you belong to this category, then you can consider purchasing a PAYD policy alongside the mandatory third-party car insurance plan.
Multiple Car Owners
If you have multiple vehicles at home, then you can purchase a Pay As You Drive policy for the vehicles you use less. In this way, you will not have to pay huge premiums for insurance for vehicles that are used much less.
Small City Residents
If you live in a small city or town and your car covers only a few hundred kilometres per month, then you can also invest in a Pay As You Go policy.
How Pay-As-You-Drive Insurance Different from Comprehensive and Third-Party Car Insurance?
Understanding the difference between PAYD, comprehensive and
third-party car insurance is crucial to making an informed selection for your vehicle.
PAYD differs from third-party car insurance in the sense that it offers coverage for its own damage. On the other hand, third-party car insurance is a basic form of insurance that offers coverage only for third-party damages and losses arising from your insured vehicle.
Further, the key difference between Pay-As-You-Go Insurance and comprehensive car insurance is the premium calculation. With a comprehensive policy, you have to pay a fixed insurance premium regularly to maintain your insurance coverage.
But when you buy a PAYD policy, you only pay for the number of kilometres you have driven your car. Thus, it becomes a lot more cost-effective if you drive your car very less.
Conclusion
Pay-As-You-Drive insurance is an ultimate alternative to standard car insurance plans. It is a usage-based insurance model that saves you from paying regular
car insurance premiums, which are often very high.
However, if you are a regular car user and driver very often, then a comprehensive car insurance policy is the best choice. While it is slightly pricey, it is totally worth the premiums that go out of your pockets.
Whether you want to buy Pay-As-You-Drive insurance or a comprehensive car insurance policy, we have a range of options at budget-friendly premium rates.
Our
Pay-As-You-Drive plans are fully customisable and can be adjusted based on the kilometres you use. In addition to these benefits, we offer a higher claims settlement ratio, an extensive list of policy inclusions and 24x7 customer service.
Frequently Asked Questions
What documents do I need to buy the “pay as you drive” cover?
The type of documents required to purchase pay-as-you-car insurance coverage can differ depending on your insurance provider. For instance, you don’t need any additional documents to purchase our Reliance Limit Sure policy. You can buy your PAYD cover by providing basic details, such as your vehicle make and model, fuel type, registration year, etc. Contact our team for more information.
How can I claim my Pay As You Go car insurance (pay for what you drive)?
The claim process for Pay-As-You-Drive Insurance is the same as that of a regular car insurance policy. You can file your claim online as per the inclusions of your policy.
Is “Pay As You Drive” cover better than comprehensive car insurance?
Both Comprehensive and Pay-As-You-Drive Insurance coverage offers nearly the same insurance benefits. However, the added advantage of a PAYD policy is that it is highly cost-effective compared to a comprehensive car insurance policy. This makes PAYD insurance a great alternative to comprehensive car insurance plans for drivers who use their cars less frequently. For regular drivers and heavy users, comprehensive car insurance is a better option.
When can I file a claim for my “Pay as You Drive” policy?
You can file a claim for your “Pay As You Drive” insurance right after experiencing any unforeseen event, such as a road accident, theft, or any other, based on your policy inclusions. At Reliance General Insurance, you can register your claim by informing us of the number given.
Is a “Pay as You Drive” policy expensive?
No. A Pay As You Drive policy is not expensive. It is a cost-effective alternative to other long-term policies for which you need to pay a heavy premium regardless of whether or not you have used the vehicle during your tenure. With a PAYD cover, you only need to pay for the kilometres you have covered, which makes it highly affordable for occasional drivers.
Where can I buy cheap Pay As You Go Car insurance?
With Pay-As-You-Go car insurance, you only pay based on your usage. So, if you have lower car usage, your premium will be lower. You can visit Reliance General's car insurance page and check your premium on our intuitive car insurance calculator.