New Delhi, Decoration Praveen. In the wake of the Kovid-19 epidemic, most companies have provided work from home facilities to their employees, which has also reduced the ability to travel across the country with their cars. According to a recent media report, around 50% of the distance traveled by cars has been seen across the country from the middle of March to the first week of June. This is a period in which we are going through unusual changes on every front. Employees of companies across the country are being encouraged to work from home, most of the shopping is happening online, as well as many more, which have completely changed the ways of doing it. When everything is going through a phase of change, then why should the insurance sector lag behind?
Under this change, now the use-based motor insurance policy has been introduced in the country. In the motor insurance policy offered by various insurance companies, you can take insurance according to the kilometer of the total distance traveled by the car and not for the entire year as before. For car owners who want to take insurance according to the distance covered by the car, the simple answer is ‘Pay as you use’ insurance policy. In the last few weeks, some insurance companies have introduced a pay as you use drive insurance policy. For those who do not drive a lot of cars, this policy is a great option to reduce the expenses on motor insurance.
Edelweiss General Insurance (EGI) – Edelweiss SWITCH
Edelweiss General Insurance (EGI )’s Edelweiss SWITCH is a driver-based motor insurance policy, which not only provides a driver with the ability to turn (on) and off (off) their motor insurance on a usage basis, but also a He covers many vehicles inside the policy, as it is a floater policy. Unlike a traditional Motor OD policy, Edelweiss SWITCH premiums will be calculated based on the age and experience of the driver. In this policy, customers get convenience in saving on insurance expenses as well, as they have to pay the same premium under the pay as you use model of Edelweiss SWITCH. However, an accidental damage claim can be made only when the policy is on, while the car is covered 24/7/365 for fire and theft. Because these incidents can happen even while the vehicle is standing. The Pay As You Use model may change the criteria for setting motor insurance premiums, as it will also take into account the use of the vehicle and the vehicle owner’s experience of driving the vehicle.
Bharti AXA General Insurance – Pay as You Drive
Bharti AXA General Insurance is going to introduce a use-based motor insurance policy for private car owners under the sandbox project of IRDAI. Pay as you drive insurance policy will be a combination of both Comprehensive Own Damage (OD) and Third Party (TP). In this, the TP premium will be fixed according to IRDAI rules, while Comprehensive OD will be calculated based on how many kilometers the car owner is estimated to run in the given time. Currently, insurance companies have come up with three slabs – 2,400 km, 5,000 km and 7,000 km under the pay ‘as you drive’ motor insurance policy. However, customers who feel that they will be driving their car more than 2,500 km or 5,000 km can opt for a higher slab in the middle of the policy period or move to a regular insurance policy, In which they get coverage for unlimited kilometers. However, customers will have to pay the extra premium that will come out in both these situations. If the customer crosses the chosen kilometer in the insurance slab, the TP insurance cover will remain intact, while the OD cover will not be found.
Tata AIG General Insurance – AutoSafe
Tata AIG General Insurance has also joined the list of insurance companies that provide usage-based insurance coverage. The company has launched a vehicle insurance policy called ‘AutoSafe’. In this policy, telematics based next-gen applications and devices are used to calculate the distance and premium covered by the car. The app also protects the policyholder from choosing the kilometer to save premium, encourage safe driving, and prevent car theft, as it comes with GPS tracking feature. This telemetics device is fitted in the car as soon as the insurance policy is operational and it remains in the car for the entire duration of the policy. In this plan, customers have 2,500 km, 5,000 km, 7,500 km, 10,000 km, 15,000 km and 20, There is an option to choose a slab of 000 km. If the kilometer taken during the policy period expires, the customer can purchase the additional kilometer by opting for the top up kilometer option. Apart from this, to encourage safe driving, this policy also provides the customer with bonus kilometers from time to time when driving the car safely. The device is connected to a mobile app that records all information, the distance traveled and reports on the vehicle’s condition and the policyholder’s driving pattern. Therefore, the less you drive your car, the less premium you will have to pay. In order to encourage safe driving, this policy also provides bonus kilometers to the customer from time to time when driving the car safely. The device is connected to a mobile app that records all information, the distance traveled and reports on the vehicle’s condition and the policyholder’s driving pattern. Therefore, the less you drive your car, the less premium you will have to pay. In order to encourage safe driving, this policy also provides bonus kilometers to the customer from time to time when driving the car safely. The device is connected to a mobile app that records all information, the distance traveled and reports on the vehicle’s condition and the policyholder’s driving pattern. Therefore, the less you drive your car, the less premium you will have to pay.
The pay as you use motor policy will be completely suited to the needs of the customers. Such a change in vehicle insurance policy seems highly justified at a time when the government is trying to discourage unnecessary travel and companies and employees are benefiting from working from home. People who do not drive a lot can save money by taking a Pay As You Use Car Insurance policy. However, when you consider how much you drive, the hours you spend sitting in the car will not be counted, especially when you are stuck in traffic for hours. The distance traveled by your car matters. The Pay as You Drive model will definitely help in increasing the number of policy takers.
(The author is head of motor insurance at PolicyBazaar.com. The views published are personal.)