Want a lower motor insurance premium? Watch how (often) you drive

Floater policies will be cost-effective, provide convenience of renewal at one go for multiple vehicles

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While it is too early to predict the impact on premiums, experts say PAYD and PHYD are likely to prove beneficial to customers in the long run.

Sarbajeet K Sen

4 min read Last Updated : Jul 11 2022 | 10:04 PM IST

The Insurance Regulatory and Development Authority of India has allowed insurance companies to offer new add-on features to the own damage (OD) component of motor insurance policies. These are ‘Pay as you drive’ (PAYD) and ‘Pay how you drive’ (PHYD). It has also approved the launch of a floater motor policy.

How premium will be determined

In the case of PAYD, premium will be based on the distance the car travels or the time period for which it is used. PHYD, on the other hand, will take into account driving behaviour.

“The premium for PAYD OD add-on cover will be

Topics : IRDAI Motor insurance insurance premium vehicle insurance motor insurance policy vehicle premium Car insurance policy Motor insurance rules IRDAI insurance companies

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