Drive less, pay less: Is pay-as-you-drive insurance cover right for you?
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar pointed out the privacy concerns of usage tracking and cautioned that top-ups or penalties can erase savings for heavy drivers. He suggested estimating past mileage from service records, keeping a 15-20% buffer and checking whether add-on covers lapse.
What Abhishek Kumar said
Are there privacy concerns with pay-as-you-drive motor insurance?
Yes. Pay-as-you-drive plans work by actively monitoring how much you drive, either through odometer checks or telematics devices. That monitoring can raise tracking and privacy concerns for policyholders, so it is worth weighing this before opting for a usage-based cover over a regular policy.
Who should be careful before buying a pay-as-you-drive policy?
I would be cautious if your driving is consistently heavy or hard to predict. Under these plans, buying top-ups during the year, or paying penalty deductibles, can quickly cancel out the discount you got at the start. For such drivers, the saving that looks attractive at purchase may not survive the policy year.
How do I choose the right kilometre slab for a pay-as-you-drive plan?
Rather than relying on a rough guess, I suggest working out your actual past usage from old service invoices or annual maintenance records. Then add a safety margin of 15–20% for detours or emergency outstation trips. If your estimate lands close to a slab limit, going for the higher slab at the start can cost less than topping up with extra kilometres mid-term.
What should I check about add-on covers in a pay-as-you-drive plan?
I suggest confirming whether bundled add-ons, like zero-depreciation cover and roadside help, stay in force or lapse once you reach your distance slab. It is far better to know this before buying than to discover, after crossing the limit, that these covers have quietly stopped.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on insurance
Business Standard explains pay-as-you-drive motor insurance, where the own-damage premium is linked to the kilometre slab a car owner picks. It covers how slabs, top-ups and telematics work, how much the discount can vary, who the cover may suit or not suit, and the terms buyers should check before choosing it over a standard policy.
Publisher source
Drive less, pay less: Is pay-as-you-drive insurance cover right for you?