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“Pay as you drive” vehicle insurance policy by NIA

Published on February 01, 2023
Current context: New India Assurance has introduced its Pay as You Drive (PAYD) vehicle insurance policy, which charges premiums based on vehicle usage.
“Pay as you drive” vehicle insurance policy by NIA

  • This type of insurance, also known as Usage-based insurance (UBI), pay how you drive (PHYD), and mile-based auto insurance, is determined by factors such as the type of vehicle, time, distance, behaviour, and location.
  • The PAYD policy offers discounts on renewals, coverage beyond distance limits, and additional protection features like zero depreciation, roadside assistance, engine protection, and return to invoice.
  • Insurance premiums are calculated based on driving, and distance traveled instead of a fixed amount in traditional car insurance.
  • This model benefits those who use their vehicles sparingly. The policy includes a third-party cover and own-damage cover.
  • Customers can save money on own-damage premiums through renewal discounts if the vehicle is driven within specified kilometres.
  • Recently, the Insurance Regulatory and Development Authority of India has permitted insurance companies to launch telematics-based motor insurance covers such as PAYD and PHYD, allowing vehicle owners to pay for insurance based on usage.

Question:

Q1. Who releases the “pay as you drive vehicle” insurance policy
a. SBI
b. NIA
c. Bajaj excel
d. NSE


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