How Car, Bike Insurance Premiums Will Get Cheaper With IRDAI’s ‘Pay As You Drive, How You Drive’

The time when you had to pay a fixed annual rate for your auto insurance policy is long gone. Now, with the introduction of telematics-based motor insurance coverages like Pay As You Drive and Pay How You Drive, vehicle owners can actually choose how much to pay for their insurance coverages. It is made possible by permission from the Insurance Regulatory & Development Authority of India (IRDAI). #

How Does PAYD Vehicle Insurance Policy Work?

One kind of two-wheeler insurance model is Pay As You Drive (PAYD). It enables some customisation of insurance policies by the policyholders, which helps lower the premium, resulting in cheap bike insurance for people. ##

The PAYD concept is relatively new in the Indian market, as was already mentioned. As a result, a few auto insurance providers in India are now providing PAYD policies. PAYD insurance operates under the straightforward premise that if you drive less, your insurance premium will be lower. Your accident risk is low because you don’t drive frequently; your insurance bill should reflect this. With this add-on, policyholders are assured they won’t have to pay a high premium based on the make and model of their automobile but rather on how frequently they use it. Car and bike insurance has become more affordable with these add-ons. ##

How Does PHYD Vehicle Insurance Policy Work?

PHYD is determined based on your driving habits. You pay less, the better and safer you drive. The telematics gadget uses GPS technology to determine your driving scores, car condition, and other metrics to gather information about your driving. A driver score is determined based on the data gathered.

Low driving scores do not result in penalties, but the premium concessions these drivers are eligible for are also quite small. Drivers can use these ratings to develop better driving habits.

Factors To Consider For ‘PAYD’ and ‘PHYD’ Policies

PAYD makes the most sense for demographic groups like:

  • People who live in metro cities
  • People who live in high-risk (Accident) prone areas
  • People who wish to drive safely and increase their insurance limit

Whereas for PHYD, the benefits are for:

  • Occasional drivers and those who work from home
  • People who rely on public transport
  • People who own multiple vehicles
  • People who drive less than 35 kilometres per day

Floater Policy

The IRDAI has introduced the floater policy, which covers many vehicles and two-wheelers under a single policy, irrespective of how many vehicles you own. Please use the two-wheeler premium insurance calculator to calculate how much you need to pay as a premium. #


Even if you are a safe driver, PAYD & PHYD might occasionally prevent you from receiving a claim on your premiums. You are better suited for a basic two-wheeler insurance plan if you frequently drive faster than the speed limit and commute daily to far-off places for work. *

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

## The insurer provides all savings as per the IRDAI-approved insurance plan.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.






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