A shift towards Personalised Motor Insurance with PAYD
As per this study, more than 1 in 3 customers opt for Pay As You Drive plans (PAYD), while 3 in 4 tend to renew them, indicating a shift towards personalised motor insurance coverage. The report shows notable regional variation, with the highest uptake in the South (55 per cent) and the lowest in the North (36 per cent). The report also highlights the most popular distance slabs, with 30 per cent choosing the 5000 km option, followed closely by 7500 km and 10000 km options.
Popular distance slabs preferred by customers:
Top cities using PAYD plans:
Delhi: 8%
Bangalore: 5%
Mumbai: 3%
Pune: 2%
Gurgaon: 2%
The report concludes that the adoption of PAYD plans is highest in the metros as they collectively account for a significant percentage of insured vehicles. Additionally, 20 per cent of these customers often opt for top-ups, showing flexibility in their usage needs.
Where metropolitan areas account for 40 per cent of the motor insurance market, there is a growing trend in smaller cities as well, with tier-2 and tier-3 cities showing a 13 per cent increase in online adoption of motor insurance.
The best way to ensure your and your vehicle’s safety is by adding appropriate riders to your policy. Kumar suggests the following add-ons as must-have for customers:
Engine protection cover: This essential add-on protects your engine from liquid damage due to water ingress, which is not covered under a regular policy. It also covers engine breakdowns and hydrostatic locks.
Consumables cover: Extended exposure to water can damage lubricants, engine oil, and the gearbox. Since standard policies don’t cover these damages, opting for a consumables cover is wise.
Nil Dep: This covers an end-to-end cover to the car & should be taken with the other recommended add-ons.
Moreover, vehicle owners should know that a normal comprehensive policy does not cover the complete costs in case of damage to the engine. Therefore adding additional coverage can insure your vehicle from extended and seasonal damages.