Last month, a father of two from Ahmedabad sat across my desk with a thick file of bills. He drives only on weekends, yet his premium looked like he was a daily highway commuter. We moved him to Pay As You Drive. His car insurance cover stayed solid. His cost dropped. His smile said everything.
If your car rests more than it runs, PAYD can feel like a breath of fresh air. You pay in line with how many kilometres you actually drive. Smart, fair, and IRDAI approved. No more paying a full fare for half the ride.
Key points
- What is Pay-As-You-Drive?
Usage based car insurance where your own damage premium is tied to distance driven in a policy year. - Who it suits
Weekend drivers, work from home professionals, senior citizens, multi car households, new drivers easing into the wheel, small city commuters. - Why it saves
Lower usage usually means lower risk. Insurers pass a part of that saving to you through kilometre slabs and safe driving rewards. - How it’s tracked
A telematics device or app notes distance and basic driving patterns. You can top up kilometres if you are about to exceed your chosen slab. - Peace of mind
Third party cover stays. Own damage cover stays. What changes is the pricing logic, not the protection.
Want a quick sense of fit? Tell me your rough monthly kilometres and city. Contact us today and let’s take the next step, together.
How PAYD Works and Why Car Owners Love It
Sharmaji likes simple maths. “If you eat half the thali, you shouldn’t pay for the full plate.” That’s exactly how PAYD treats your car insurance premium.
How the system runs
When you buy a Pay As You Drive policy, the insurer offers kilometre slabs, for example, 2,500 km, 5,000 km, or 7,500 km per year.
You select your slab based on how much you expect to drive. The own damage portion of your premium is calculated on that slab, not on the standard “average driver” estimate.
Tracking your usage
Your insurer gives you either:
- A small OBD telematics device that plugs into your car’s port, or
- A mobile app that uses GPS to record distance, or
- Asks you to do a quick self pre-inspection to ensure compliance. This is is the most common method these days.
These track only the basics needed for billing. Many insurers keep it privacy-friendly with quick, two-minute pre-inspection, no constant surveillance.
Key benefits for low-mileage drivers
- Direct savings: Less driving = lower own damage premium.
- Flexibility: You can top-up kilometres mid-year if needed.
- Safe driver rewards: Some insurers offer extra discounts for smooth driving habits.
- Same protection: Third-party cover and add-ons like zero depreciation stay intact.
Ahmedabad-specific advantage
In cities like Ahmedabad where many residents own more than one vehicle or use public transport regularly, a PAYD plan ensures you aren’t overpaying for cars that spend more time parked than driven.
Sharmaji’s tip
Keep a small buffer above your regular driving to avoid surprise top-ups. If you drive ~4,000 km a year, go for the 5,000 km slab. Peace of mind is worth a few extra rupees.
Add-Ons That Supercharge Your PAYD Policy
“Insurance is like chai. Plain chai is good, but masala chai? That’s where the magic happens.” Add-ons are your masala.
Top Car Insurance add-ons worth your rupee
- Zero Depreciation Cover
- Keeps your claim payout high by ignoring parts depreciation.
- Perfect for cars under 5 years old.
- Engine Protection Cover
- Protects against damage from water ingress (hello monsoon in Ahmedabad) or oil leakage.
- Critical if you live near flood-prone areas.
- Roadside Assistance
- Free towing, jump-starts, tyre changes, and fuel delivery.
- A lifesaver if your car decides to nap in the middle of SG Highway.
- Return to Invoice
- If your car is stolen or totalled, you get its original invoice value, not just the depreciated amount.
- Consumables Cover
- Covers small but costly items like nuts, bolts, oil, and lubricants during claims.
Why these work with PAYD
With a usage-based policy, your premium is already trimmed. That leaves room in your budget to add layers of protection without overspending. Think of it as upgrading your seat from economy to premium economy: extra comfort, same trip.
Sharmaji’s tip
Always compare the total cost of your slab + add-ons vs. a standard policy. Many times, you’ll still come out paying less while getting better coverage.
Picking Your Perfect PAYD Slab (Without Getting Trapped)
“In insurance, overestimating is like ordering a thali when you only want chai — you’ll pay more and waste half.”
Step 1: Audit Your Driving
- Check your last 12 months’ odometer readings.
- If you use your car only for school runs and Sunday shopping, you don’t need a high slab.
Step 2: Be Realistic, Not Optimistic
- Choosing the smallest slab to “save money” can backfire.
- Once you cross your limit, extra kilometres will be charged at a higher rate.
Step 3: Factor in Life’s Surprises
- Weddings, road trips, emergencies — all add unexpected miles.
- Add 10–15% buffer to your estimate.
Step 4: Revisit Annually
- Lifestyle changes = driving changes.
- Review your slab before each renewal; don’t just copy-paste last year’s choice.
Mistakes Sharmaji Sees All the Time
- Overbuying: Paying for 10,000 km when you barely clock 5,000.
- Underbuying: Picking 3,000 km slab, then paying penalties after 5,000.
- Ignoring Add-Ons: Skipping engine cover in a flood-prone city like Ahmedabad.
Pro Tip
If you’re unsure, start mid-tier. It’s easier to upgrade than downgrade mid-policy.
Ready to Save? Let’s Get You Covered
PAYD is not just a new trend, it’s common sense with a premium tag. You drive less, you pay less. No gimmicks, no small print traps. And when life throws you a curveball, the right slab and add-ons will have you cruising through without a financial dent.
And remember, not every insurance person understands Ahmedabad roads, traffic, or driving habits. SMNICS does. We match your car insurance with your reality, so you get the best cover at the fairest price.
Don’t let the wrong policy eat your savings. Call SMNICS now, and we’ll pick the perfect car insurance plan for you, with benefits that actually matter in Ahmedabad.
