This insurance company has launched a pay-as-you-go policy; Know how it works
Days after the Insurance Regulatory and Development Authority of India (IRDAI) cleared general insurance companies to issue certain technology concepts for Motor Own Damage (OD), Go Digit General Insurance, backed by Indian cricketer Virat Kohli, launched the launch of “Pay as you Drive”. (PAYD) add-on functionality for Own Damage (OD) car insurance policies. The company has become one of the first Indian insurers to introduce the add-on for its customers.
The announcement was made on July 18, less than two weeks after regulator IRDAI allowed general insurers to introduce such technology concepts into automotive OD policies.
Customers who drive less will now pay less with this addon, Go Digit said in a July 18 press release. This means that the reduction will apply to anyone driving less than 10,000 kilometers per year on average from the time it was purchased by the current showroom owner.
How will Digit pay when driving insurance?
Digit will use the odometer reading, telematics data and chosen annual mileage to grant this discount, which can be up to 25%. Digit customers will be able to complete the process in five minutes using technological video pre-inspection and complete the entire policy issuance process in less than 30 minutes, the company said.
Who will benefit?
This is particularly beneficial for people who don’t drive their car regularly but still pay the same premium as a heavy-use driver, the insurance company said. This trend is seen among many metro and Tier I city dwellers, where they use public transport or on-demand taxis on top of their own vehicle for their daily commute. People with multiple vehicles and retirees with less need for their car will also benefit.
Speaking about the launch, Kunal Jha, Head of Automotive Products and Actuarial at Digit Insurance, said, “Digit is proud to be the champion of ‘Pay as You Drive’ in the country. The company’s customer-centric approach and technological agility enabled us to launch the feature in record time. This usage-based add-on is initially launching with a cap of 10,000 km so that as many people as possible can profitably benefit from insurance. This will also be available through our partner distribution network, which also contributes to the majority of our automotive business in Tier II, III and IV cities.
Digit gained a 4.5% market share in the motor segment and recorded Rs 3,276 crore in gross written premiums from its motor business in FY22. It recorded growth of 34.6% year-on-year in the automotive segment, compared to industry growth of 3%. The company now offers cashless repairs at more than 6,000 network garages across India and had a claims settlement rate of 98.2% for passenger cars in FY22, said Digit in its press release.
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