Pay-as-you-go car insurance is a fairly new policy that determines your insurance premiums based on the usage of your car. As a buyer, you have to give an approximate distance the car is expected to cover during the year and your premium is decided accordingly which can be conveniently paid through the eft payment type.
This kind of car insurance is highly beneficial if you do not use your car a lot. Now, let us look at some other amazing benefits of this super-saver policy.
Benefits of the Insurance
- Personalized cover for your insurance
This is possibly the most beneficial feature of pay-as-you-go insurance. You can alter your premium during the tenure of the policy itself. As your policy progresses you can increase your distance slab or choose a higher slab limit to match the distance covered. Your requirements will determine your cover. Apart from the third-party cover and damages cover that the policy offers, you also get extra covers that include zero depreciation, roadside assistance, etc. The add-ons are an extended branch to your existing cover. You can get them by paying an additional amount to your premium.
- Lower premiums
This benefit is what makes a lot of people choose this insurance. Normally premiums for car insurance are based on the features of the car that include its model, engine capacity, how old the car is, etc. These factors help determine how much coverage you will get in case of any emergency. For pay-as-you-go insurance, the only thing that matters is the distance your car has travelled. The usage determined the premium. If your car is not used much, you will have to pay a lower premium. And this makes the most sense because a lesser running car will be less likely to meet with any accidents or mishaps. Most people find the premium for this insurance justified.
- Pay as much as you drive
If your car does not have much running, why should you pay an enormous premium? This is a question most insurance buyers have for companies. The premium is often pre-decided irrespective of how many miles your car has covered. Pay-as-you-go insurance charges you only for the distance covered by your car. So the deal is fair, transparent, and highly beneficial to salaried individuals with a tight budget.
- Telematics device installation
A part of this insurance includes the installation of a telematics device in your car. This device along with its installation is entirely free of cost. The device monitors the running of your car along with its overall condition. It keeps track of the distance covered and also checks the driving habits such as usual speed, breaking styles of the driver, and regular maintenance such as oil changing, tire alignments, etc. The device records are used to document the functionality of the car for insurance premium purposes. Usually, such a device would have cost you extra money, but the pay-as-you-go insurance offers it as part of the whole deal.
- Third-party coverage
The third-party coverage offered by this insurance is your best friend. Once you purchase the insurance, the third-party cover will stay for the entire year. If you cross your distance threshold during the year, your damages cover might exhaust but the third part cover will continue until you are at the end of your policy for the year. Upon renewal, the cover will also be renewed. This is an added advantage that makes you worry less about your cover even after crossing the specified miles limit.
- Opportunity to save money
To make the pay-as-you insurance offer more appealing, companies offer discounts for insurance renewal annually. This maintains customer loyalty and more people are likely to opt for the insurance. The discount can be anywhere between 5 and 20 percent, thus reducing your premium even further. Imagine having to pay lower than what you expected even after renewal!
Pay-as-you-go insurance surely is beneficial to those who wish to spend their money wisely for intermittent car use. Although the main benefits and features of the policy remain the same, different companies might have different terms and conditions. Make sure to read and research about them before you make your choice.