In this motor insurance policy, the premium is decided on the basis of the use of the vehicle. You can pay the premium according to the amount of time you drive your car or vehicle. This policy can prove to be very useful for people who do not drive much.
Under the Motor Vehicle Act, it is mandatory for every vehicle owner to get his vehicle insured. As such, many companies sell motor insurance policies in the market, which claim different types of coverage for any damage to you. But today we will tell you about such a motor insurance policy, which will reduce the extra burden on your pocket. Actually, under this policy, you will have to pay as much premium for the Motor Insurance Policy as your vehicle will run.
In this policy, the premium is decided on the basis of the use of the vehicle. You can pay the premium according to the amount of time you drive your car or vehicle. For people who do not do much driving, this policy can prove to be very useful. This is an add on cover policy. Which can be taken with a regular motor insurance.
This scheme will not only reduce your pocket money, but in the coming days, it can become the reason for a big change in the insurance sector. Although the practice of this type of insurance policy is almost a decade old in western countries, it has started recently in India. You can avail the benefits of this insurance policy in two ways:
If one opts for PAYD premium, then the premium will be calculated on the basis of kilometers driven so far or the age of the vehicle. The insurer will use the data received from the telematics in the vehicle to track the kilometerage and duration. In fact, the less the vehicle runs on the road, the lesser is the risk of its getting damaged and lesser will be the amount of premium.
Pay How You Drive (PHYD):
The premium in this insurance policy is decided on the basis of how you drive the vehicle. If your driving is good then this option can prove to be very beneficial for you. For PHYD the insurance company uses telematics and GPS to determine the vehicle usage pattern, driving habits, engine condition, vehicle speed and a few other points. On the basis of all these points are given to each driver. These numbers play an important role in deciding the amount of your insurance premium.
Benefits of Usage Based Insurance:
There are many advantages of this type of insurance policy. The vehicle owner will have to pay a lower premium. Insurance claim easily in case of any damage, as well as this policy will also help in improving driving skills. If you use the vehicle sparingly, then before opting for expensive insurance premium, also have a look at the usage based insurance policy.Live TV
