Monthly car insurance: Save more with flexible payments and hassle-free coverage; here's how

The monthly mode car insurance policy allows customers to purchase short-term car insurance, as either standalone OD (Own Damage) policies or short-term policies for the OD component of a comprehensive policy. Here, the third-party policy remains active throughout the short-term policy. Additionally, the third-party component of a comprehensive policy cannot be segmented into shorter-term policies and shall remain yearly coverage policies.

Key features of the monthly mode policy include:

 1. Coverage duration: Monthly policy shall offer coverage for only the tenure of that policy. At the end of each policy term, a new policy with a new policy number will be issued to cover the following month and subsequent months.

2. No Claim Bonus: If a claim is made during the policy term, the NCB will remain fixed for the first year of coverage. This will aid in boosting persistence as if the customer defaults on payment with the existing insurer, NCB will become zero and the premium for the next policy will increase. After 12 months, NCB will reset to 0.

3. IDV: Apart from the event of an endorsement, the Insured Declared Value (IDV) of the car shall remain constant for the renewal of the subsequent 11 policies. Standard IDV deduction guidelines shall be applied on the renewal of the 13th policy.

4. Underwriting Guidelines: The underwriting guidelines shall remain unchanged for the policy bought under monthly mode during the 12 months.

5. E-mandate: Customers can easily set up monthly auto-debit instructions on UPI or e-mandate on Net banking while purchasing motor insurance policies. This ensures payments are auto-deducted.

Paras Pasricha, Business Head of Motor Insurance at Policybazaar.com stated that introducing the monthly option for car insurance's own damage policies is truly a thoughtful and strategic move. This innovation will provide customers with enhanced affordability and greater financial flexibility. "By offering monthly policy options, we are providing our customers to shell out premiums without facing any financial strain like in the lump sum annual scenario, while reinforcing our dedication to customer-first solutions. Additionally, this initiative marks a significant step forward in the evolution of the motor insurance industry and sets a new standard for other innovations to follow," said Pasricha.