In the lockdown and COVID-19 pandemic, for the past few weeks, several insurance companies have initiated to offer pay-as-you-drive insurance. Some drivers are not using the roads daily, for such drivers, some companies are offering an opportunity to reduce car insurance costs. By the by in today’s world, most of the companies have adopted work-from-home policy due to the ongoing Covid-19 pandemic. And it has been seen that there is a nationwide drastic change of reduction in kilometers we drive due to the ongoing pandemic. Almost 50% driven is down according to recent media reports.
The working behavior has changed as employees are being encouraged to work from home, most of the shopping is online, and many other things have also changed due to this pandemic crisis. It is to be acknowledged that a change is taking place in the insurance sector as well. In such a situation, we now finally have usage-based motor insurance policies in India. The different insurers launch new types of car insurance policies. Instead of the run-of-the-mill full year the car owners to insure their vehicles for kilometers, they tend to drive.
Here are some modern insurance policies for car owners to reduce car insurance costs;
Edelweiss SWITCH
Edelweiss General Insurance’s Edelweiss SWITCH is a driver-based motor insurance policy that allows vehicle owners to switch their motor insurance ‘on’ and ‘off’ based on usage. It is a floater policy, which covers multiple vehicles under a single policy. SWITCH is entirely different from traditional motor own damage policy. For SWITCH, the insurance premium is calculated based on the age and experience of the driver.
Bharti AXA Pay-as-you-drive
Bharti AXA General Insurance offers usage-based motor insurance policies for private car owners under IRDAI’s Sandbox project. The Pay-as-you-drive insurance product will be a combination of both comprehensive own damage (OD) and third-party (TP) policy. Here, the TP premium will be decided based on IRDAI norms while the comprehensive OD premium will be decided as per how many kilometers you intend to drive your car in a specific period. Now, the insurer has three segments of policies- 2,500 km, 5,000 km, and 7,500 km under the Pay-as-you-drive motor insurance policy.
The ‘Pay-as-you-drive’ model will strengthen insurance penetration in the overall sector by bringing more and more vehicles under the insurance umbrella.
