Our first-ever car always overwhelms us, right? To protect yourself financially from the hefty expenses of a car in the case of any accident occurring, car insurance works best. They will reimburse you for the expenses if you meet all the terms and conditions of the policy. But, buying car insurance seems like a liability when you do not use your car on a regular basis. What if you only have to pay a premium as you drive your car?
What is a pay-as-you-drive car insurance policy?
It is a motor insurance policy that enables you to pay a premium on the basis of your car usage. If you use your car on a regular basis, you have to pay high premiums and if you do not use your car much, you have to pay less premium as compared to the former. The usage of a car will be determined by the kilometres driven by you.
For example, if your car covers 1500 kilometres in a year, you can choose a kilometre bracket of 1000 to 2000 kilometres and pay the premium accordingly. Your premium payment will differ from insurer to insurer.
Why should you buy it?
There are numerous reasons why such type of car insurance would be the best for you. Following are the best of the advantages explained below:
Third-party coverage means the protection of the owner of a vehicle from any legal liability, including death or bodily harm to a third party or damage to their property when the insured vehicle is involved. Pay-as-you-drive insurance provides your the coverage of third-party coverage as an additional service. This means you do not have to pay any third party if any accident occurs (terms and conditions applied).
If you are the one who owns more than one car, then pay-as-you-drive insurance is for you. It means you do not have to buy an insurance policy for each of your cars. A single insurance policy can cover all of the cars you own.
Free telematics device
For keeping a record of your kilometres, insurance companies install a free telematics device in your car. It will help you to keep track of your kilometres and remind you when you reach the limit. Such a device also helps you in knowing the health of your car. You can save yourselves from an accident with regular health checkups and improvement of your car.
Premium under your pocket
Generally, insurance companies charge premiums based on geographical locations, motor capacity, cubic capacity, model, type of engine, age of your car, and brand, which sometimes contributes a lot to increase your premiums. But, in the case of pay-as-you-drive car insurance, only kilometres matter majorly.
Buying insurance is part of life to secure yourselves from paying non-essential but important expenses. But planning it in advance can ensure the efficient utilisation of your money and available resources. The frequency of your usage and comparison between various insurers are the key factors you must keep in mind while buying a car insurance policy.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com