Pay as you drive insurance policy launched

After the announcement by the Insurance Regulatory and Development Authority of India IRDAI allowing general insurance companies to introduce telematics-based concepts in motor Own Damage OD policies, Go Digit General Insurance has introduced a Pay as you Drive PAYD add-on feature in their motor insurance policy. Pay as you drive policies charge lower premiums when the vehicle is driven less and charges higher when driven more. The premium is based on a policyholder's risk exposure and distance driven.

Under the Go Digit Insurance Policy, the discount will be applied to anyone driving less than 10,000 kilometres per year, on an average from the time the current owner bought it from the showroom. Digit will use the odometer reading, telematics data and annual kilometres to give this discount, which can go up to as high as 25 per cent.

PAYD policies are beneficial for those who don't drive their car much but still have to pay the same premium as a driver with heavy usage. People in small towns and people with multiple vehicles and retired individuals can benefit from the product if their usage is less.

Kunal Jha, Head Motor Products and Actuarial, Digit Insurance said, The company's customer-first approach and tech agility has enabled us to launch the feature in record time. This usage-based add-on is initially launched with a 10,000 km-cap in order to ensure maximum people can avail insurance in a cost-effective manner. This will be available through our partner distribution network, which contributes to the majority of our motor business throughout tier 2, 3 and 4 cities. Recently, Edelweiss General Insurance launched SWITCH, a comprehensive motor insurance product, under the IRDAI's Sandbox initiative. IRDAI recently came out with guidelines allowing insurance companies to launch telmatics-based motor insurance policies.

The app detects motion and automatically activates insurance when the vehicle is driven, making it convenient for customers. It rewards policyholders if they are driving well, as it measures both the quantity and quality of driving and calculates premiums accordingly.