Ensuring your ride does not always come cheap, especially when you want to get coverage that is ideally comprehensive. Since finding cost-effective insurance plans is an everlasting need, new and better car insurance options keep popping up every now and then. One of these new and more cost-effective types of car insurance plans is the pay as you go car insurance. A highly customised type of car insurance, pay as you go or pay as you drive insurance plans are perfect for folks who require comprehensive yet easy-on-pocket car insurance plans.
What is Pay as You Drive Car Insurance?
As the name suggests, pay as you drive insurance plans are a type of comprehensive car insurance policy that works as per the driving habits of the owner-driver and the usage. These plans are highly cost-effective and can be customised individually for each vehicle under consideration. The premium for these plans is majorly decided as per the number of kilometres you drive your car. Think of it as a normal comprehensive car insurance plan but with an added discount in the premiums depending on the usage of your car.
Key Features of Pay as You Drive Insurance
Similar Tenure as Basic Plans: Pay as you drive insurance plans are exactly like other comprehensive car insurance plans available in the UAE. Pay as you go car insurance plans are valid for one year and have a grace period of 1 month for renewals. This means you can carry on your regular car and insurance-related tasks as you would with a generic comprehensive car insurance plan.
Usage-Based Insurance: Pay as you drive insurance plans are usage-based car insurance plans. This means if you use and drive your car less in a particular tenure, you will pay proportionately lesser premium for the insurance plan and vice versa.
Matching Comprehensive Coverage: Even with significantly lower car insurance premiums, pay as you go car insurance plans offer the same level of comprehensiveness as normal car insurance plans. All the benefits you receive are the same as those in basic comprehensive plans, and so are the limits and sub-limits. Consider your pay as you go insurance plan as a normal comprehensive car insurance plan but with a discount.
Available as Multi-Car Insurance: You can get pay as you go car insurance plans as multi-car insurance plans as well. If you drive multiple cars or have family cars of your spouse or parents, you can buy a linked car insurance policy for all of them. The procedure of getting a linked pay as you drive insurance plan is yet again the same as it is with the regular multi-car insurance plans.
Advantages of Pay as You Drive Insurance
Customisable Plans: The biggest advantage of getting a pay as you go car insurance plan is that you can customise it – even as per your driving schedule and style. While the option to get custom plans is available for all, thanks to add-ons, only pay as you drive car insurance plans can be catered as per the driver’s personal driving needs and habits as well.
Increased Flexibility: Needless to say, pay as you go car insurance plans are more flexible than any other kind of car insurance available out there. You can opt for a lower slab or a higher slab of kilometres at any time you like as per the current requirements.
Lower Premium Amounts: Pay as you go car insurance plans run on the concept that if you drive safe and less, you pay less. This makes pay as you drive car insurance plans the most cost-effective kind of car insurance plan.
Complimentary Telematics Device Installation: Even when it is the customers who opt for pay as you drive insurance, they do not have to bear the expense of getting a telematics device installed for performance tracking. The insurance provider sets up the device for you in your car and bears all the expenses for it as well. You get access to the stored data and live updates that are sent to the insurance company.
The generic procedure of how pay as you drive car insurance works is pretty similar to any basic car insurance plan. The only thing different is the kilometre slabs of the insurance plans. When you buy your pay as you drive insurance plan, you are required to choose a driving slab. This slab will contain the number of kilometres you expect to drive your car during the tenure of the plan. Once you choose your required slab, the insurance premium of your plan is adjusted. The basic slabs you will find for pay you go car insurance plans include less than 3000 kilometres, 3000 to 5000 kilometres and more than 5000 kilometres. There can be a slight change in these numbers as per the plan and the providers. In addition to choosing a slab, you will be asked to enter details about the odometer of the car as well.
Once you have chosen the driving slab and purchased the plan, the insurance company will ask you to get a telematics device installed in your car. This device will be used to track car usage in the given tenure. The device can be connected to a telematics application that comes with it. Both the provider and the driver-owner get live updates of the total number of kilometres the car has been driven.
What Happens If You Exceeds Your Driving Limit?
A very likely scenario, in many cases, is that you may end up exceeding the slab limit of your pay as you go car insurance plan. Once that happens, your insurer gets an immediate notification through the telematics application. The insurance provider will contact you when you have exceeded the kilometre limit of the plan. You can simply top-up your pay as you drive insurance plan if you happen to exceed the kilometre limit currently active. If no claims were made during the tenure, you can even switch to another coverage with a higher limit on kilometre slabs. The premium rates will be charged on a pro-rated basis. The premium you pay when refilling or opting for another coverage will only be for the own damage insurance part of the plan. The third-party coverage will continue till the end of the tenure.
Should I Be Concerned About the Telematics Device Data?
The thing about telematics devices is that they not only cover the kilometres driven by your four-wheeler during the tenure of your pay as you go car insurance plan but also your driving style. Every time you pump up the accelerator, hit the brakes, the condition of the clutch, everything gets recorded. This means not only your car usage but also your driving will influence the car insurance plan. Your driving data is stored with the insurance company and it is used to decide the premium for your pay as you go car insurance plan. The location of your car and other similar details are also captured by telematics devices but not used by insurance providers. Data security is of utmost priority in such scenarios.
Inclusions of Pay as You Drive Insurance
Any pay as you drive insurance plan covers all the basic benefits that a comprehensive car insurance plan covers. Given below are the basic inclusions of a pay as you go car insurance plan:
Third-party liabilities include vehicular damages and third-party bodily injuries. It also includes any liabilities that are borne towards the family of the third party.
Own damages from a collision or an accident.
Emergency medical treatment expenses for the owner-driver.
Theft cover and fire damage cover.
Natural calamity damage cover.
Man-made disaster damage cover.
24x7 roadside assistance cover.
Who Should Buy Pay as You Go Car Insurance Plans?
The premium you pay for your pay as you go car insurance plan is highly dependent on how much you drive your car and the way you drive it. If you are someone who does not use their car every day or very often, pay as you go car insurance is perfect for you. If you use your car to travel to work or drive it quite a lot for other reasons, pay as you drive insurance might not be the best fit for your car. If you are an expert driver with an impeccable driving record, pay as you drive car insurance may be the right fit for you. But if your car is driven by inexperienced drivers, say your children, who are still in the early phase of their driving years, then pay as you drive insurance will not be the ideal choice.
How to Buy Pay as You Go Car Insurance Plans?
Given below are the steps you will need to follow and the details you will require when buying a pay as you drive insurance plan:
Go to the car insurance page at Policybazaar UAE or the provider’s website.
Head to the purchasing portal.
Select the car insurance plan you want to buy. This is where you will be required to select the pay as you go car insurance plan you want.
Choose the basic benefits and add-ons that you want in your pay as you drive insurance plan.
Move forward and select the kilometre slab you want.
Provide the details of your odometer as asked by the application form. Enter any further personal details as required.
Finish filling up the form and check your final premium based on the kilometre slab.
Make the payment and finalise the purchase.
You will receive your insurance documents at the registered email address that you used when buying the insurance plan. Once everything is settled, the insurance company will allot a time slot to get your telematics device fixed in your car. Once this last step is completed, you are all set for the next 13 months.
In a Nutshell
Pay as you drive insurance plan is an amazing initiative that helps in reducing insurance costs while also increasing the plan’s cost-effectiveness. In addition to that, the motivation of paying less for subsequently equal benefits just by driving less and safely is better for road safety issues as well as the environment. Just make sure that you actually benefit from pay as you go car insurance plan before you buy it. Evaluate your insurance needs as well as private transportation needs before taking a concrete step. Also, try and take some advice from our experts and compare plans before you buy to get the best possible option.
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