Pay As You Drive (PAYD) insurance is a car insurance add-on that calculates premiums based on vehicle usage. Traditional car insurance uses a fixed rate. PAYD adjusts the premium based on your driving habits.

But what is Pay As You Drive insurance exactly? Unlike traditional policies, PAYD calculates your premium using real-time data on your mileage and driving behaviour.

Pay As You Drive features include mileage tracking, real-time monitoring and potential discounts for low mileage and safe driving. This type of insurance is ideal for those seeking a more personalised and cost-effective solution.

What is Pay As You Go Car Insurance?

Pay As You Drive car insurance charges only for the number of kilometres you drive. If you drive less, you will pay less. When purchasing coverage, you inform the insurance company about your expected driving distance and choose the appropriate slab.

The premium is then set based on this anticipated vehicle usage.  Instead of a flat fee, you pay based on how much and how often you drive.

Pay As You Drive (PAYD) insurance is also known as Pay As You Go (PAYG) car insurance, pay per mile insurance or mile-based insurance.

Pay As You Drive with Reliance General Insurance

Reliance General Insurance offers Reliance Limit Sure - Pay As You Drive insurance that helps you get the necessary coverage at an affordable rate.

Under this car insurance add-on, you can set the kilometre limit at different slabs, starting at 2500 km, which can be increased in multiples of 1000 km, depending on your requirements. Additionally, we offer you grace kilometres up to 125 km so that you have enough time and scope to comfortably renew your policy without losing coverage.

Features of Reliance General Insurance Pay As You Drive Insurance

• Coverage: Provides Own Damage cover within the selected available kilometres.
• Kilometre Option: Starts at 2,500 km and can increase in multiple of 1,000 km.
• Grace Kilometres: Offers an additional 125 km as a buffer.
• Top Up Limit: This policy allows adding more kilometres if you exceed your available kilometres.
• Carry Forward Limit: Unused kilometres can be transferred to the next policy year, so your paid coverage is not wasted.

How Does Pay As You Drive Insurance Work?

When you opt for Pay As You Drive, you select an estimated distance you will drive in a policy year. This estimated distance is also known as "Available Kilometres" or "Kilometre Limit." Insurers generally set it in slabs starting at 2,500 km and policyholders can increase it to multiples of 1,000 km.

Steps to get Started:

• ​Choose Your Kilometre Limit:
1. Starts at 2,500 km.
2. Increases in multiples of 1,000 km.
• Receive a Discount:
1. Based on your chosen Kilometre Limit.
2. ​Lower limits offer higher discounts on the Own Damage Premium.

When buying and renewing the policy, you must declare your current odometer reading. This ensures that you stay within your selected Kilometre Limit. For instance, if your odometer reads 5,000 km when you purchase the policy and you choose a 2,500 km limit, your reading at the end of the policy period should be 7,500 km or lower.

Additional Features:

• Top Up Limit: 
1. If you run out of Available Kilometres, you can top up with extra kilometres to ensure continued coverage.
• Carry Forward Limit:
1. Any unused kilometres can be carried forward to the next policy year, ensuring no wastage of paid coverage.
• Grace Kilometres:
1. Provides an additional 125 km as a buffer, which allows you time to renew your policy without immediately exceeding your limit.
• Claim Process:
1. Claims within the defined slab will be resolved as usual. If a claim exceeds this limit, the policyholder may be required to make a co-payment of a specified amount. However, it is best to clarify this with the insurer. 

This structured approach offers flexibility and potential savings, making it an excellent choice for drivers looking to align their insurance costs with actual usage.

Pay As You Drive Benefits

Flexibility to Choose Your Driving Distance

Our PAYD car insurance add-on allows you to select a mileage slab that matches your expected usage, ensuring you pay only for what you need. Choose your driving distance based on your needs, from as low as 2,500 km, with increments of 1,000 km.

Savings on Premium for Less Driving

Drivers who use their vehicles less frequently can save significantly on premiums compared to traditional fixed-rate policies. Pay lower premiums if you drive less. The fewer kilometres you choose, the higher the discount you receive on your Own Damage Premium.

Option to Carry Forward Unused Kilometres

Any unused kilometres can be transferred to the next policy year to prevent wastage of your paid coverage. This ensures you don’t lose out on paid coverage. You also receive an additional 125 km buffer that allows you time to renew your policy before running out of coverage.

Option to Top Up Kilometres if You Run Out of Existing Slot

If you exceed your chosen mileage slab, you can easily top up your policy by purchasing additional kilometres (in multiples of 1000 km) and ensuring continuous coverage without overpaying initially.

More Transparency and Control On Your Car Insurance Policy

Accurate billing is based on your vehicle's odometer reading, which was declared at the time of policy purchase and renewal. This process tracks your mileage and provides transparency when calculating your premium.

Encourages Safe and Responsible Driving

Pay as you drive insurance encourages drivers to minimise unnecessary trips, leading to potential cost savings and reduced environmental impact. Many PAYD policies offer discounts or rewards for safe driving behaviours and ensure safer roads.

Why Choose Reliance General Insurance for Car Insurance

Reliance General Insurance offers a wide range of car insurance options tailored to meet your needs. We provide all types of car insurance, including third-party car insurance coverage, to ensure complete protection for your vehicle to give you peace of mind on the road.

Choosing Reliance General Insurance’s Pay As You Drive insurance also allows you to gain control over your insurance costs while promoting responsible driving. With us, securing affordable and tailored car insurance has never been easier.

Conclusion

Pay As You Drive (PAYD) car insurance offers a modern, flexible, cost-effective vehicle coverage solution. With the approval of the Insurance Regulatory and Development Authority of India (IRDAI), PAYD policies have become a viable option for Indian drivers.

This model adjusts premiums based on actual usage and provides significant savings for those who drive less frequently. Key features such as mileage tracking, real-time monitoring and options to top up or carry forward kilometres make PAYD insurance an attractive choice.

Embrace the benefits of Pay As You Drive insurance and drive confidently, knowing your insurance aligns with your driving habits.

Frequently Asked Questions (FAQs)

What documentation is required for Pay As You Drive insurance?

Documentation for Pay As You Drive insurance is similar to traditional policies, such as vehicle registration, driving licence and proof of address. You will also need to declare your odometer reading.

Who benefits the most from Pay As You Drive insurance?

Pay As You Drive insurance is ideal for infrequent drivers, such as students, retirees or people living in cities with good public transportation. It offers significant cost savings for those who only drive occasionally.

Can I change my mileage slab in Pay As You Drive insurance if my driving habits change? 

Yes, most Pay As You Drive insurance policies, including Reliance General Insurance’s, allow you to top up your kilometres if you exceed your initially chosen slab. This ensures continuous coverage without the need to overpay initially.

How does PAYD insurance impact my no-claim bonus (NCB)?

Your no-claim bonus remains intact with Pay As You Drive insurance. Safe driving and not making claims can help you accumulate NCB discounts and reduce your premium in subsequent policy renewals.