Pay As You Go/Drive Insurance

Pay As You Go/Drive Insurance

In 2026, motor insurance in India has become significantly more personalised. If your vehicle is often parked or used only for occasional trips, pay-as-you-drive insurance can help you cut costs without compromising essential protection. This "usage-based" model ensures you drive less and pay lower car insurance premiums.

What is Pay As You Drive (PAYD) Insurance?

Pay-as-you-drive insurance is a flexible plan in which the premium is calculated based on the distance your car travels in a year. Unlike traditional policies that charge a flat fee regardless of usage, pay-as-you-drive insurance lets you choose a distance "slab" (e.g., 2,500 km, 5,000 km, or 10,000 km). It is specifically designed for the Indian market to reward low-mileage drivers with discounts of up to 85% on their Own Damage premium.

Features of Pay As You Drive Insurance

• Customised Slabs: Choose a kilometre range that matches your expected usage.
• Cost Savings: Lower risk for the insurer (due to less time on the road) translates to a lower premium for you.
• Flexible Top-ups: If you drive more than your slab allows, you can buy extra kilometres mid-term.
• Comprehensive Protection: It typically covers third-party liabilities and own-damage, just like a standard policy.

How Does Pay As You Drive Insurance Work?

The process for pay-as-you-drive car insurance is highly digital:

• Selection: You choose a distance limit at the start of the policy.
• Verification: You share your current odometer reading (usually via a photo or video on the insurer's app).
• Pricing: Your premium is calculated based on that limit.
• Monitoring: At the end of the term or during a claim, the insurer verifies that your total distance stayed within the agreed limit.

Who Should Buy Pay As You Drive Insurance?

This plan is the best pay-as-you-go insurance option for:

• Work-from-home employees who use their cars only on weekends.
• Multiple car owners who have a "spare" car for short errands.
• Senior citizens who drive very little within their housing society or local area.
• Public transport users who keep a car for emergencies but use the Metro for daily travel.

How to Buy Pay as You Drive Insurance?

You can easily pay for car insurance as you go through insurer apps or websites. Simply enter your car registration details, choose your preferred distance slab, and upload a live photo of your odometer. Most major Indian insurers now offer the ability to pay monthly car insurance or annual premiums for these usage-based plans.

What Happens if the Declared Car Usage Limit is Exhausted?

If you exceed your limit, you are effectively "uninsured" for Own Damage. However, most insurers provide a grace period or a notification to buy a top-up pack. Purchasing additional kilometres ensures your cover remains active for the remainder of the policy year.

How to Claim Pay As You Drive Insurance?

The claim process for Pay-as-you-go car insurance is standard:

• Notify the insurer immediately after the accident.
• The surveyor will check the current odometer reading against your starting reading.
• If you are within the slab, the claim is settled via cashless repair at a network garage or through reimbursement.

Documents Required for Pay As You Drive Insurance Claim

• Copy of Policy: Your digital Pay-as-you-drive car insurance document.
• Odometer Photo: Required at the time of claim for verification.
• RC & Driving Licence: Standard vehicle and driver identification.
• FIR: Only required in cases of theft or third-party injury.