Policybazaar has launched a new “monthly mode” car insurance policy, a first for the motor insurance industry. This option allows customers to pay premiums on a monthly basis, unlike traditional car insurance policies that require annual or long-term payments.
How it differs from existing car insurance policies
Payment flexibility: Traditional car insurance requires an upfront annual premium, whereas the new policy spreads payments across monthly instalments.
Policy issuance: Unlike standard policies, which remain valid for a year, the new monthly policy is renewed with a fresh policy number each month.
No Claim Bonus (NCB): In annual policies, NCB is accumulated over time. In the monthly mode, if a customer defaults on payment, NCB resets to zero.
Insured Declared Value (IDV): While annual policies adjust IDV at renewal, the new policy keeps IDV constant for 12 months unless an endorsement is made. Standard IDV reductions apply after the 13th policy renewal.
E-mandate for payments: Unlike annual renewals that require manual payments, customers can automate monthly deductions via UPI or net banking for uninterrupted coverage.
Key features of the monthly mode policy
Coverage duration: One-month coverage per policy, with a fresh policy issued each month.
Underwriting guidelines: Remain the same throughout the 12-month period.
Automatic renewals: Payments can be auto-deducted to ensure continuous coverage.
Paras Pasricha, Business Head – Motor Insurance at Policybazaar, said, “Introducing the monthly option for car insurance is a strategic move to enhance affordability and financial flexibility. This allows customers to pay premiums without financial strain while setting a new benchmark for the industry.”
