You work from home 4 days a week. Your car only leaves the parking lot on weekends for a grocery run or a movie. Yet, when your car insurance renewal comes up, you pay the exact same premium as a taxi driver who drives 100km every day.
Does that sound fair? No.
In 2026, Indian insurers have finally woken up. Thanks to IRDAI's new rules, you can now buy "Pay As You Drive" (PAYD) insurance. If you drive less, you pay less. It is that simple. Here is how to slash your premium by up to 25% instantly.
Disclaimer: PAYD covers "Own Damage" premiums only. Third-Party premium is fixed by law and cannot be discounted. Discounts vary by insurer and car model.
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| Work From Home? Stop Paying Full Premium for a Car That Just Sits in the Garage |
1. What is "Pay As You Drive" (PAYD)?
Traditional insurance assumes you are a "high usage" driver. PAYD allows you to choose a kilometer slab based on your actual usage.
How it works:
- Declare Your Usage: You tell the insurer, "I will drive less than 5,000 km this year."
- Get a Discount: They give you a discount on the "Own Damage" (OD) portion of the premium.
- Verification: Some ask for an odometer photo / video call during the claim, while others install a small telematics device.
2. The "Slab" System: How Much Can You Save?
Insurers like Digit, Tata AIG, and HDFC Ergo offer tier-based discounts. Let's look at the potential savings for a mid-sized car (e.g., Hyundai Creta).
| Yearly Usage (Slab) | Typical Driver Profile | Approx. Discount on OD Premium |
|---|---|---|
| < 2,500 km | Fully Remote / Second Car | 20% - 25% OFF |
| < 5,000 km | Weekend Driver / Housewife | 15% - 20% OFF |
| < 7,500 km | Short Office Commute | 10% - 15% OFF |
Note: If you exceed your limit, you can easily "Top-up" more kilometers by paying a small fee, just like a mobile data recharge.
3. "Switch On / Switch Off" Feature
Some advanced policies (Sandbox products) take this a step further.
- Scenario: You are going on a 1-month vacation to Europe. Your car will be parked in a secure garage.
- The Feature: You open the app and turn "OFF" your Own Damage cover.
- The Benefit: For those 30 days, you are not charged for accidental damage coverage (Theft & Fire usually remain active). The savings are credited back to you.
4. Who Should Buy This? (Checklist)
PAYD is not for everyone. If you drive Delhi to Chandigarh every week, stick to a standard comprehensive plan.
Buy PAYD if:
- You have a Second Car that rarely gets used.
- You work from home (IT, Freelancers).
- You use the Metro/Uber for daily commute and only drive for leisure.
- You are a senior citizen who only drives to the local market.
5. Is the Claim Process Harder?
This is the biggest myth. People fear, "If I crash, will they check my odometer and deny the claim?"
The Reality: As long as you are within your purchased kilometer slab, the claim process is identical to a regular policy. Zero Depreciation, Engine Protection, and Roadside Assistance add-ons work exactly the same way.
The only risk is if you lie about your reading. Don't do that. Most insurers ask for a simple video of the odometer periodically via their app.
Conclusion: Pay for Protection, Not Parking
Insurance is a cost, but it shouldn't be a waste. If your car runs less, your risk is less. Why should your premium be high?
Before you blindly renew your policy with the same old agent, ask for a "Pay As You Drive" quote. You could save enough money to pay for your next full tank of petrol.
Helpful Resources:
Digit: Pay As You Drive Explained
Acko: Check Low Mileage Discounts
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