Pay-as-you-drive (PAYD) motor insurance plans are gaining popularity among consumer segments such as hybrid and remote workers, households with multiple cars and homemakers, a PolicyBazaar report revealed.
The report mentioned that hybrid or work-from-home employees comprise 35 per cent of PAYD customers. They represent the largest share of the customer base.
Pay as you drive implies ‘usage-based’ car insurance. It allows the insured person to pay for insurance based on the distance driven, rather than a flat fee. This means that those who drive their cars rarely will have to pay less premium amount with the PAYD insurance policy. There is no pre-condition or pressure of maximum kilometres to be driven.
The segment experienced a 25 per cent growth in the past year, underscoring the growing acceptance and demand for PAYD plans among these employees, the report further stated.
Families with multiple cars: They represent a quarter of the total PAYD customer base. This segment, with a 40 per cent YOY growth, is the fastest growing among the PAYD customer base, indicating a significant demand for PAYD plans among households with multiple cars.
Homemakers: As far as homemakers are concerned, they comprise 15 per cent of the PAYD customer base, reflecting a significant and expanding market segment.
The past one year saw 30 per cent growth in this category, showing a rising acceptance and demand for PAYD plans among homemakers.
Vehicle preference
The report further revealed that hybrid or remote workers opt for hatchbacks (40 per cent) followed by sedans (30 per cent) and SUVs (30 per cent). This variety indicates a balance between compact, efficient vehicles and larger, more comfortable options suitable for varied needs.
Significantly, households with multiple cars tend to own hatchbacks (60 per cent) followed by sedans (20 per cent), and SUVs (10 per cent).
This distribution indicates a preference for compact, efficient vehicles, likely used for daily commuting and errands.
Among homemakers, hatchbacks are the top priority (50 per cent), followed by sedans (20 per cent) and SUVs (20 per cent).
This distribution shows an inclination for compact and efficient vehicles, which is considered ideal for urban driving and family needs.
Geographical location
Additionally, hybrid or remote workers choosing PAYD plans are primarily located in Bangalore (11 per cent) followed by Delhi (10 per cent), Gurgaon (6 per cent), Pune (5 per cent), and Hyderabad (4 per cent). It is understandable since these cities are major tech and business hubs where remote working is prevalent.
At the same time, households with multiple cars choosing PAYD plans are primarily found in Delhi (8 per cent), Bangalore (8 per cent), Chennai (6 per cent), Pune (4 per cent), and Gurgaon (4 per cent). These major urban centres have higher car ownership rates.
Also, homemakers opting for PAYD plans are concentrated in Delhi (10 per cent), Bangalore (9 per cent), Chennai (7 per cent), Pune (5 per cent), and Mumbai (5 per cent).
This distribution shows a higher awareness among urban homemakers, the report stated.
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