Pay as you drive: This company launches motor insurance based on distance driven
Leading private non-life insurer Bharti AXA General Insurance on Wednesday announced its partnership with leading web aggregator PolicyBazaar.com to sell 'Usage-based Motor Insurance policies for private car owners under the regulatory Sandbox project.
The usage-based motor insurance, popularly known as 'Pay As You Drive', allows customers to pay the premium depending on how many kilometres the car has traveled.
Under this product, a customer pre-declares vehicle usage for a period of one year. The insurance premium will be calculated dynamically as per the pre-declared distance in km. The customer can choose from three slabs - 2500 km, 5000 km and 7500 km - as per his/her usage need.
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Announcing the partnership, Bharti AXA General MD and CEO Sanjeev Srinivasan, Managing said, "We are very happy to join hands with PolicyBazaar.com to distribute 'Pay As You Drive' motor insurance policies under the Sandbox project. The emerging culture of shared mobility and work from home makes the usage-based motor insurance a very pertinent product for car owners, where they can pay the premium as per the usage of the car. We believe the partnership for 'Pay As You Drive' will help us offer the need-driven motor insurance to the car owners more seamlessly and make the customer-centric insurance a reality."
Bharti AXA General Insurance was shortlisted by the Insurance Regulatory and Development Authority of India (IRDAI) for Usage-based Motor Insurance in the non-life category and Short-term Health Insurance in the health segment under its regulatory sandbox project.
"We believe innovative products like 'Pay As You Drive' are the way forward for the industry and are glad that Bharti AXA has taken a lead to create this product under the regulatory Sandbox introduced by the IRDAI. This offering further strengthens our partnership and customer-centricity commitment," said PolicyBazaar.com CEO Sarbvir Singh.
The customers can buy the 'Pay As You Drive' product by Bharti AXA General Insurance from Policy Bazaar in three simple steps. They need to select the plan as per the usage pattern from the three available slabs and provide odometer reading, KYC details, and customer consent form, as per the regulatory requirement. Own damage (OD) premium will be calculated post factoring the premium benefit as per the pre-declared slab. The issued policy will have all the coverage under standard motor OD cover for the tenure of one year.
Apart from enjoying extra premium benefits as per the declared usage slab, Mr. Srinivasan said, the customer also has the option to move to a higher slab in the middle of the tenure or make a transition to standard motor own-damage cover, in case of driving beyond the pre-declared kilometers.
As car usage is highly varied across users, the product benefits those who drive less. 'Pay As You Drive' is ideal for the customers who have multiple vehicles and may not use each vehicle as much, he said, adding that it is also useful for those who commute daily via public transport or frequently travel beyond city limits and rarely use their personal vehicle.