Pay-As-You-Consume Policy: Pay Less if You Drive Less

If your car or bike is spending more time in the garage, you may be able to reduce your vehicle insurance premium amount with a Bajaj Allianz General Insurance pay-as-you-consume policy.

Just as one size doesn’t fit all, the way one drives a car is not the same as someone else. If you agree with this, then paying a standard car insurance shouldn’t make any sense because good drivers are being penalised with rates based on factors that have little to do with their driving. Insurers have taken note of this and one of the premium insurers, Bajaj Allianz General Insurance, is among the leading insurer to launch a ‘pay-as-you-consume’ product in the Sandbox framework provided by IRDAI. Owing to the overwhelming response from its customers, the pay-as-you-consume add-on cover can be opted along with the basic OD plan under package product, bundled and standalone OD product.

What is pay-as-you-consume?

Pay-as-you-consume insurance, sometimes known as telematics insurance, monitors aspects of your driving, either based on how much you drive or the way you drive and adjusts the premium accordingly. This kind of insurance will give the insurer a more accurate view of how you drive and use the car, so they can use this to give safer and more responsible drivers lower car insurance premiums.

For the customer, this insurance gives the flexibility to choose the insurance premium based on how they want to use their vehicle and intends to extend benefits to them. This will encourage customers to drive safely, thus making roads safer in the long run.

Consider the case of someone who has two or more cars. There could be multiple scenarios emphasizing that all the cars are not used in the same way – one car may be used every day to go around in the city, other cars may be used by family members who don’t go out every day, or one car may be assigned to the city driving and the other used only for getaways outside the city. By using something known as telematics – using a telematics device installed in the vehicle – the driving metrics recorded on a mobile App or by information provided by the customer through a device, the pay-as-you-consume insurance adjusts your vehicle insurance accordingly. This means you pay the premium based on your driving.

In case of Bajaj Allianz General Insurance, the mobile App ‘Bajaj Allianz GIC’, the customers get to record their driving metrics as well have an easy access to their policies instantly. Customers need not worry if the opted kilometres during the policy period get exhausted – they can add kilometres to their plan using the top-up plan. If a customer forgets to add kilometres to the top-up plan, the company has offered a unique concept of ‘Grace km’ gratification, which is provided at the time of claim in case kilometres opted during the policy period are exhausted.

To sum it up, the pay-as-you-consume cover offered by Bajaj Allianz General Insurance principally empowers customers to choose their premium and make their own policy, as per underwriting guidelines. Keeping customisation at its centre, customers can opt for their premium as per the plan they select, depending on the need and usage of their vehicle. This product offering not only lets you decide your premium, but it also lets you decide your coverage as well and provides benefits for safe driving.

The pay-as-you-consume car insurance consists of not only on damage cover but also third-party cover. Just like the regular car insurance plans, the third-party premium rates under pay-as-you-consume insurance are decided by the IRDAI.

To sum up the advantages of this kind of cover, you may be able to save money if you’re a low mileage driver. But what if you use your vehicle a lot? It is ideal to get an estimate of the premium you will be required to pay for it. For these policies, you will be required to pay an annual premium, as that is the duration of these policies. If you have a car and want an estimate for a pay-as-you-consume cover, you can use a car insurance calculator for the plan of your choice. You can then start saving on your vehicle insurance with this plan.

The Bajaj Allianz General Insurance pay-as-you-consume cover allows you to switch to a higher kilometre slab or add grace KM during the policy tenure if you have exhausted your kilometre limit. The cover can be more economical for high-risk drivers already facing high premiums. *

A car owner has these advantages with a pay-as-you-consume cover:

· Lower car insurance premiums based on the actual usage of the car. *

· Customised cover as per preference. There are options of add-on covers such as zero depreciation cover, roadside assistance cover and so on. *

Bajaj Allianz General Insurance allows you to buy the pay-as-you-consume cover through multiple channels.

* Standard T&C apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

This article is part of a featured content programme.(Published 10 August 2023, 08:46 IST)