Bharti AXA General Insurance, Wdnesday, announced its partnership with leading web aggregator to sell ‘Usage-based Motor Insurance’ policies for private car owners under the regulatory Sandbox project.


The usage-based motor insurance, popularly known as ‘Pay As You Drive’, allows customers to pay the premium depending on how many kilometers the car has travelled.


Under this product, a customer pre-declares vehicle usage for a period of one year. Accordingly, the insurance premium will be calculated dynamically as per the pre-declared distance in km. The customer can choose from three slabs – 2500 km., 5000 km. and 7500 km – as per his/her usage need. 


Announcing the partnership, Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance, “We are very happy to join hands with to distribute ‘Pay As You Drive’ motor insurance policies under the Sandbox project.  The emerging culture of shared mobility and work from home makes the usage-based motor insurance a very pertinent product for car owners, where they can pay the premium as per the usage of the car. We believe the partnership for ‘Pay As You Drive’ will help us offer the need-driven motor insurance to the car owners more seamlessly and make thecustomer-centric insurance a reality.’’


Notably, Bharti AXA General Insurance’s proposal for a usage-based motor insurance product was shortlisted by the Insurance Regulatory and Development Authority of India for its regulatory sandbox project. As car usage is highly varied across users, the product benefits those who drive less. 


The customer can buy the ‘Pay As You Drive’ product by Bharti AXA General Insurance from
Policy Bazaar in three simple steps. 

1. The customer needs to select the plan as per the usage pattern from the three available slabs.

2. They need to provide odometer reading, KYC details, and customer consent form, as per regulatory requirement.

3. Own damage (OD) premium will be calculated post factoring the premium benefit as per pre-declared slab. The issued policy will have all the coverage under standard motor OD cover for the tenure of one year.


Apart from enjoying extra premium benefits as per the declared usage slab, Mr. Srinivasan said, the customer also has the option to move to a higher slab in the middle of the tenure or make a transition to standard motor own-damage cover, in case of driving beyond the pre-declared kilometres. 


The additional derived premium for both cases will be recovered from the customer. Even if the policy is not renewed in case of breach of kilometers, the liability coverage of the policy would be still valid for the entire duration of the policy. Further, any third party claim arising during the policy tenure would be treated as per existing liability claims practice.


‘Pay As You Drive’ is ideal for the customers who have multiple vehicles and may not use each vehicle as much; therefore, they may not have to pay a large premium amount. It is also useful for those who commute daily via public transport or frequently travel beyond city limits and rarely use their personal vehicle.