Irdai has recently allowed insurance companies to launch telematics-based motor insurance covers, like PAYD, enabling car owners to decide how much to spend on insurance.
New India Assurance (NIA) on Monday launched its “Pay as You Drive” (PAYD) policy, dubbed as “revolutionary” with features like discounts on renewals, coverage beyond distance limit, and enhanced protections such as nil depreciation, roadside help, return to invoice, etc.
The policy comes with various benefits. For instance, the customer can save money through discounts on renewal premiums, provided the vehicle runs within the specified kilometers. The discount is applied on the basic “own damage premium”.
In addition, the coverage will continue for the policy’s remaining duration even if the vehicle has been driven beyond the threshold limit. India’s largest non-life insurance firm said in a press release that clients can still avail of a discount on the renewal, albeit at a lower applicable range.
Besides these discounts, the policy buyer can include add-ons with an additional payment for enhanced safeguards, such as zero depreciation, engine protection, return to invoice, roadside assistance, etc.
Commenting on the product launch, Neerja Kapur, chairman cum managing director of NIA, said, “PAYD policy fulfils a long-standing demand of customers for simple and flexible products that consider different usage patterns. Our product is one of the few in the market to help the customer manage his outflows towards vehicle maintenance.”
She added, “This product will promote better compliance, reducing the risks associated with uninsured and underinsured vehicles plying on the roads.”
Key Features Of The Product
· Discount on basic own damage premium during renewals based on the vehicle’s mileage.
· Continuous coverage even if the vehicle crosses the distance threshold limit.
· “Pay as You Drive” discount continues even if there is a claim.
· It comes with add-ons for enhanced coverage, such as nil depreciation, engine protection, return to invoice, roadside assistance, etc.
The Insurance Regulatory and Development Authority of India (Irdai) has recently allowed insurance companies to launch telematics-based motor insurance covers, like PAYD and pay how you drive (PHYD), enabling vehicle owners to decide how much to spend on their car insurance. As such, some insurance companies in India are offering use-based car insurance; for instance, if your car remains parked more in the garage, you can opt to pay less. It benefits those who do not use their vehicles much.
The PHYD insurance premiums are calculated based on your driving instead of a fixed amount paid in a conventional car insurance policy. Hence, the distance travelled and the person's driving behaviour are critical for companies to determine your car in PHYD insurance premiums.