Insurance: Ensuring PAYD and BH insurance

financialexpress.com:

By Nitin Kumar

Motor insurance is undergoing a transformative evolution, driven by a keen understanding of customer needs and advancements in technology. Right from product innovation to claims, motor insurance is adopting enhanced services and operations.Examples are new-age policies such as Pay As You Drive (PAYD), EV insurance and add-ons, and BH series motor insurance. These policies indicate that companies are taking a customised approach to motor insurance, as opposed to the historical standard approach. Let’s delve deep into these new-age policies, and if you really need them:

Understanding PAYD policy
As the name suggests, ‘Pay As You Drive’ is a revolutionary concept that has transformed the motor insurance landscape, especially since the Covid-19 pandemic had brought mobility to a halt. While traditional models followed a standard approach of fixed premium regardless of usage, PAYD introduces a more equitable approach through usage-based premium. So, for lower usage, the discounts are higher and the premium is lower.PAYD also offers a cost-effective solution for those who do not use their vehicles frequently, such as urban dwellers who rely on public transportation for daily commuting or families that have multiple cars. PAYD aligns insurance costs with actual vehicle usage, providing a fair and transparent alternative to conventional fixed-rate premiums.Different insurers follow different kinds of PAYD models. Some plans allow you to set your annual driving limit under different slabs. According to the slab you choose, your premium will be calculated. Some other plans let you ‘switch off’ your policy for days that you don’t drive. So, for every switched-off day, you earn a bonus day in your policy.

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