Bharti AXA General Insurance has partnered with insurance web aggregator PolicyBazaar to sell Pay as you drive insurance policies.
You could be clocking fewer kilometres on the road or you could be using your car on alternate days by opting for carpool. Now, there’s an option to pay the car insurance premium based on the kilometres you have travelled. Bharti AXA General Insurance has partnered with insurance web aggregator PolicyBazaar.com to sell ‘Usage-based Motor Insurance’ policies for private car owners under the regulatory IRDAI’s Sandbox project.
The usage-based motor insurance, also known as ‘Pay As You Drive’, allows policyholders to pay the car premium depending on how many kilometres the car has travelled. As car usage is highly varied across users, the product benefits those who drive less.
Under this product, a policyholder pre-declares vehicle usage for a period of one year. Accordingly, the insurance premium will be calculated as per the pre-declared distance in km. The policyholder can choose from three slabs – 2500 km., 5000 km. and 7500 km – as per his or her usage need.
The emerging culture of shared mobility and work from home makes the usage-based motor insurance a very pertinent product for car owners, where they can pay the premium as per the usage of the car.
A policyholder can buy the ‘Pay As You Drive’ policy by Bharti AXA General Insurance from Policy Bazaar in three simple steps.
1. The policyholder needs to select the plan as per the usage pattern from the three available slabs.
2. They need to provide odometer reading, KYC details, and customer consent form, as per regulatory requirement.
3. 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.
Apart from enjoying extra premium benefits as per the declared usage slab, the policyholder 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 kilometres.
The additional derived premium for both cases will be recovered from the customer. But, even if the policy is not renewed in case of breach of kilometres, 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.
‘Pay As You Drive’ is ideal for the 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.