Pay As You Drive (PAYD) – New Age Vehicle Insurance Based on Core Telematics Foundation

Published: 6 Jun 2007

Praveen Chandrasekar, Team Leader, Telematics and Infotainment

In an age where consumer electronics and telematics is looking to add fillip to car brands, Pay As You Drive (PAYD), Norwich Union’s brainchild, is looking to ease the strain on car owner’s insurance bills using the novel concept. PAYD comes as one of the better cost-saving innovations that could well become an important cog in the telematics wheel. With features like stolen vehicle tracking, e-call, remote vehicle diagnostics becoming a key component of telematics systems these days PAYD is another GPS based concept that brings about commercial advantage to both the customers and insurance companies.

Insurance Companies are Pushing PAYD for the Flexibilities it offers – Driver Rules!!!

PAYD is a telematics based insurance concept which is based on three main pillars in relation to the driver – when they drive, where they drive and how often do they drive? PAYD is a consumer friendly concept where consumers can select the rate structure they prefer and the monthly premiums are calculated on the basis of the risk patterns of the driver (lower risk driving patterns yield lower rates per mile than higher risk driving patterns on the monthly premium).

From a consumer side the key driver for uptake of PAYD is the flexibility of the pay structure in PAYD and the benefits it offers like accident warning. Insurance companies are pushing for PAYD concept because of the innovative concept of calculating premiums based on driving habits, which is cost effective for the consumers and thus will help them attract consumers easily.

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