Bharti AXA General Insurance will now offer usage-based motor insurance covers, the company announced on Wednesday. In order to offer its customers with this new insurance, the insurer has joined hands with online policy aggregator PolicyBazaar.com.

The company said that the scheme is for private car owners under the regulatory Sandbox project.

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

How the company calculate the insurance

As per Bharti AXA General Insurance’s press release, under the policy, a customer pre-declares vehicle usage for a period of one year. Accordingly, the insurance premium gets calculated dynamically as per the pre-declared distance in kilometers. The customer can choose from three slabs – 2,500 km, 5,000 km and 7,500 km as per his/her usage need.

“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 the customer-centric insurance a reality,” said Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance.

The company believes the partnership for ‘Pay As You Drive’ will help it offer the need-driven motor insurance to the car owners more seamlessly and make the customer-centric insurance a reality, he added.

“We believe innovative products like these are the way forward for the industry and are glad that Bharti AXA has taken a lead to create this product under the regulatory Sandbox introduced by the Irdai,” Sarbvir Singh, CEO, PolicyBazaar.com, said.

How can you buy this insurance

It can be purchased in three simple steps from PolicyBazaar.com

1. Select the plan as per your usage pattern.
2. You will require to provide details of your—odometer reading, KYC details, and a consent form
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.

The general insurer said that its 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 company added further.