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You can now pay motor insurance premium depending on your car usage—that is how many kilometres your car has travelled.
Bharti AXA General Insurance, a private insurer, has tied up with PolicyBazaar.com to offer ‘Pay As You Drive’ Motor Insurance policies under a regulatory sandbox project.
The usage-based motor insurance, popularly known as ‘Pay As You Drive’, allows customers to pay the premium depending on how many kilometres the car has travelled.
Under this product, a customer pre-declares vehicle usage for a period of one year. Accordingly, the insurance premium will be calculated dynamically as per the pre-declared distance in km. The customer can choose from three slabs - 2,500 km., 5,000 km. and 7,500 km – as per his/her usage need.
Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance, said: “The emerging culture of shared mobility and work from home makes usage-based motor insurance a very pertinent product for car owners, where they can pay the premium as per the usage of the car.”
“We believe the partnership with PolicyBazaar.com for ‘Pay As You Drive’ will help us offer the need-driven motor insurance to the car owners more seamlessly and make the customer-centric insurance a reality,’’ he added.
Bharti AXA General Insurance’s proposal for a usage-based motor insurance product is among the several products approved by IRDAI in January this year under the Regulatory Sandbox project.
As car usage is highly varied across users, the product benefits those who drive less.
PolicyBazaar.com CEO Sarbvir Singh said, "We believe innovative products like 'Pay As You Drive' are the way forward for the industry, and are glad that Bharti AXA has taken a lead to create this product. This further strengthens our partnership and customer-centricity commitment.’’
Own damage (OD) premium will be calculated post factoring the premium benefit as per the pre-declared slab. The issued policy will have all the coverage under standard motor OD cover for the tenure of one year.
Besides enjoying premium benefits as per the declared usage slab, Srinivasan said the customer also has the option to move to a higher slab in the middle of the tenure or make a transition to standard motor own-damage cover, in case of driving beyond the pre-declared kilometers.
‘Pay As You Drive’ is ideal for 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.
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