The Trend of Pay-Per-Kilometre Explained

What is Pay-Per-Kilometre Insurance?

Pay-per-kilometre, also called ‘pay as you drive’, is usage-based insurance. It is a popular add-on that can be availed over and above your comprehensive car insurance policy. These are suitable for individuals who drive less frequently but want their vehicle’s damage covered in case of unforeseen events.

Here is a common mileage band that is typically followed by insurers and benefits that can be availed accordingly.

Benefits of Own Damage Premium

• 0-2,500 kms - 25%
• 2,501-5,000 kms - 17.5%
• 5,001-7,500 kms - 10%
• 7,501-10,000 kms - 5%
• More than 10,000 km - 0%

Here’s why the trend of pay-per is a hit:

Cost- Fairness:

It ensures cost fairness. Your policy costs are aligned with your use, and it is not a one-size-fits-all model.

Urban Living, Adjusted Premiums

Given the era of urban lifestyles, work from home, and improved public transport, commutes are shorter. This means fewer kms, which ultimately reduces your premium costs.

Environmental Benefits

Paying as per distance travelled reduces unnecessary trips, which aligns well with carbon pricing, congestion management, and reducing emissions.

Pay-Per-Kilometre: How Does it Work?

Now that you know the benefits of pay-per-kilometre coverage, let's see how it works.

Calculate Your Vehicle Usage

To apply for pay-per-kilometre coverage, first, calculate your vehicle usage. Once you have a rough idea of the same, you can estimate the kilometres you might drive in a year.

Choosing the Right Slab Matters

Based on your estimated distance in kilometres, choose a suitable slab available with your insurer. Consult your insurer about the available options of minimum slab, offers and other details.

Adequate Protection Accordingly

Several insurers offer different slabs for mileage-based benefits. For example, with some insurers, you may claim up to 25% of the own damage premium in case you've chosen a mileage slab of 10,000 km a year. The best part? Even when you exceed the 10,000 limit, you will not be charged extra and will remain covered under your comprehensive policy.

Top-Up When Needed

If you anticipate your vehicle's mileage will increase before the year's end, you can select a suitable top-up plan accordingly. This will add extra kilometres to your existing coverage.

Pro Tip: To make an informed choice, compare different insurers, their plans, benefits, distance slabs, prices, and other factors. Jio Insurance Broking helps you with that. With Jio Insurance Broking, you can compare different plans, their features, and much more. Plus, you get to have expert advice for better guidance.

Why Choose Pay-Per-Kilometre Insurance?

Choosing a pay-per-kilometre insurance offers several benefits. Here are some compelling advantages of such coverage:

Better Flexibility

This particular car insurance allows you to choose a kilometre slab that matches your driving needs and requirements. In case you see the distance exceeding, you can also use a top-up for extended coverage.

Enhanced Transparency

One of the prominent benefits of price-per-kilometre insurance is its transparency. You are billed based on the readings of the odometer that is used during the purchase or renewal of your car insurance policy.

You Drive Responsibly

With pay-per-kilometre, you try to avoid unnecessary trips. This way, you ensure you align with the km range mentioned in your policy, ultimately helping with better savings and the environment.

Bonus Incentives

In case you do not make any claims during a policy tenure, several insurers also offer discounts for safe driving and claim-free years that can be availed on your car insurance premiums.

Suitability for Different Types of Car Owners

If you're an occasional driver or someone who primarily uses public transport for commuting, then you may choose pay-per-kilometre insurance. In fact, it is also suitable for individuals with multiple cars, where you even protect cars that are used infrequently.

Who is it for?

The several benefits of pay-per-kilometre insurance make it a suitable purchase. Here is a list of candidates who can best benefit from this type of coverage:

• If you're someone who drives rarely, only uses their car on weekends or for outings. This coverage helps you save money on unused coverage.
• If you have multiple vehicles that you rarely use.
• In case you're planning to sell your car sometime soon.

Wrapping Up

Pay-as-you-drive insurance can be a smart choice for someone who drives occasionally. With such coverage, your vehicle is protected in times of need, and you do not have to worry about repair bills in case of a car accident or damage while being on the road. The only thing that changes is the extent of your protection: your vehicle is protected for the kilometres you chose. You can also adjust the kilometres with top-us whenever needed. It is innovative, better for the environment and your pockets.