Pay-As-You-Drive vs Comprehensive Cover: Which is More Beneficial?

Posted on: Jul 6, 2023 | | Written by:

Pay-As-You-Drive vs Comprehensive Cover: Which is More Beneficial?

Published on July 06, 2023. EST READ TIME: 3 minutes

The car insurance industry in India is blooming and flourishing. As a result, we see new additions and innovations from time to time and these advancements aid the customers in various ways. One such innovation is the pay-as-you-drive facility in car insurance. With the advent of this new feature, car owners can now only pay coverage when they actually drive their cars. Take a look at this article to know more about this new feature and how it is beneficial.

What is comprehensive car insurance?

Comprehensive car insurance is one of the most preferred forms of motor insurance in India. It is an excellent way to cover your car and keep it protected in a wholesome manner. You pay a fixed premium and if anything happens to the vehicle, the insurance policy covers it, provided the terms and conditions are met. Add-on covers are available along with comprehensive plans. You pay the fixed premium amount for the allotted time period and this does not change as per the kilometres travelled. Whether you use your car every day for 100 km or once a week for 2 km, you have to pay the same premium.

What benefits are offered with comprehensive car insurance?

It is very easy to buy car insurance online these days. And most people buy comprehensive covers. This is mainly because the comprehensive plans are loaded with features and benefits. Some of the most powerful advantages of this type of motor insurance are:

1. All-round protection

You get wholesome car insurance coverage when you opt for a comprehensive policy. From third-party to own damage, everything is covered under a single plan. Thus, you don't have to go looking for different plans for different covers.

2. Option to add riders

A wonderful advantage of the comprehensive plans is that you are allowed to attach riders to your policy. Riders are add-on covers that you can purchase at an additional cost. Riders increase the scope of coverage and make your plan tailor-made for your requirements.

3. Transparent

The terms and conditions of a comprehensive plan are well-laid out and you get to check them before you purchase your policy. This makes the coverage very transparent and there are no shocks and surprises later.

4. Economical

A comprehensive plan is more expensive than a third-party cover, but it offers a vast range of covers. The premium you pay is quite economical when you calculate the amount of benefits you get.

5. Easy to find

And last but not least, comprehensive car insurance is very easy to find. Every single car insurance provider in India offers a comprehensive policy and so you can instantly find a good plan at a competitive rate.

What is pay-as-you-drive in car insurance?

Let us now understand the concept of pay as you drive insurance. Here, the coverage is only extended for the actual usage of the vehicle. If you have a car that is mainly parked in your garage and you take it out for an occasional spin every now and then, you may not have to pay the comprehensive insurance premiums. You can simply opt for pay as you drive insurance and pay only when you actually use your car. This type of coverage is available as an add-on feature in motor insurance and not as a stand-alone policy.

The benefits of pay as you drive insurance

Listed below are the main benefits you get when you opt for pay as you drive insurance:

1. Very affordable

Since you only pay for the kilometres that your car actually travels, you end up making huge savings. If you do not use your car too much, you can get a refund on the own-damage premium and your overall car insurance costs can reduce by up to 10%.

2. Beneficial for occasional users

Do you use public transport for your daily commute and only take your car out for joy rides on Sundays? Do you have multiple vehicles and only use your car occasionally? If for any reason you have a vehicle that you don't regularly use, the pay as you drive insurance proves to be very handy.

3. No usage of telematics

You only need to send a video of your odometer when making a claim. There is no usage of any form of telematic when dealing with the pay as you drive insurance feature.

The points mentioned above tell you about the beneficial features of pay as you drive insurance. Consider getting this coverage if you have a car that you rarely use.

The differences between comprehensive and pay-as-you-drive car insurance

1. Differences on the basis of usage

The biggest difference is in the usage of the car. A comprehensive plan protects your car whether you drive it or not. On the other hand, a pay as you drive insurance cover only covers the vehicle for as much as it is driven, up to a maximum limit of 15,000 km.

2. Differences on the basis of type

The comprehensive car covers are stand-alone policies that can be purchased on their own. The pay as you drive insurance covers, on the other hand, are only available as riders along with a comprehensive policy.

3. The difference on the basis of cost

A comprehensive plan covers various aspects of your vehicle and therefore is costlier than a pay-as-you-drive cover. Also, there is a pay-back feature in pay as you drive insurance where you get a refund if you don't use your car too much. The comprehensive plans don't offer any refunds and you pay a fixed premium whether you use your vehicle or not.

4. Difference on the basis of availability

And finally, a big difference lies in the availability. While the comprehensive plans are popular and have been around for many years, the pay as you drive insurance covers is very new. As a result, not every insurer offers the latter. The former, however, is available widely in India.

Conclusion

With new innovations being introduced every now and then, the policyholders are benefitting in several ways. The introduction of pay as you drive insurance is surely a positive addition that many customers stand to benefit from. If you have a vehicle that you sparingly use, consider getting this cover and make good use of the benefits on offer.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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