Usage Based Discount Insurance

Usage Based Discount Insurance is a discount that a policyholder gets on the insurance premium if he drives the car below the prescribed kilometres. UBD is not a separate insurance plan. In fact, it is a discount that one can earn on their comprehensive or standalone own damage policy premium. 

Under Usage Based Discount (UBD), you can get a discount of flat 80% on the premium. It is an excellent scheme for those who use their cars less frequently as it helps them pay an insurance premium proportional to the car usage. 

Features of TATA AIG Usage Based Discount Policy: The features of the TATA AIG UBD policy will help you understand the policy better and enable you to make the right choice. 

Usage-Based discount from TATA AIG that allows policyholders to pay policy premiums proportionate to their car usage. When you opt for the UBD, the average mileage of your car in the previous years is taken as the base. For instance, if your car is four years old and has been driven for 30,000 km, the average mileage is 7500 km. Therefore, in this case, you can earn a UBD benefit of 80%.

As mentioned above, UBD is a discount that one can earn on the base policy if the car mileage is within the specified limit. Here are some of the benefits of opting for this type of insurance. 

Discounted Premium - When you opt for the Usage Based Discount Insurance, you pay a lower premium. The discount of 80% that you earn with the UBD insurance is applied to the insurance premium of the policy that you have purchased. 

Savings - The Usage Based Discount plan from TATA AIG allows you to save a considerable amount of money. If you drive within the kilometre limits specified, you get a discount on the comprehensive or own damage policy premium, resulting in savings. 

Proportionate Premium - UBD insurance lets you pay a premium only for the kilometres you drive. Thus, you do not have to spend an extra amount if your car usage is limited. 

Smooth Process - TATA AIG’s UBD plan consists of a smooth process. You can complete all the formalities from your home and make the payment online without any hassle.

Should I purchase comprehensive car insurance or invest in a drive less pay less car insurance policy? If this question is bothering you, we have got you covered. You should consider opting out for a UBD policy if you come in the following categories:

Seasonal Drivers - Some car owners drive their vehicles depending on the seasons. For instance, some of them like to keep their cars parked during the rainy season due to unpredictable weather and poor road conditions. If you are among them, then you can avoid paying premiums for the time your car is kept in your garage by buying a pay as you drive policy. 

Public Transport Users - A majority of Indian cities and towns, especially the bigger ones, have a serious traffic congestion problem. This is the reason why an increasing number of daily commuters prefer using public transport such as the metro, local trains, and buses instead of their own vehicles. A majority of them take out their cars on weekends and holidays. In this scenario, UBD insurance is a perfect and cost-effective solution. 

Multiple Vehicle Owners - If you are a multiple vehicle owner, there are high chances of you driving any one vehicle more than the other (s). Since having car insurance is mandatory for every vehicle, you cannot simply leave any of your vehicles uninsured. So, a good idea is to purchase a pay as you drive insurance plan for the vehicle that is least used by you. In this way, you can adhere to the legal requirements without dealing with the heavy premium amounts. 

Retired Individuals - The pay as you drive car insurance policies are great for retired car owners for mainly two reasons: they use their vehicles less frequently and they don’t have a regular flow of income to afford high insurance premiums. 

Less Frequent Drivers - Besides the above-mentioned individuals, pay-as-you-go insurance is an ideal solution for anyone who doesn't use their vehicles very frequently or someone who is on a budget.

The benefits of Usage Based Discount insurance consist of exclusions which one must be aware of. Understanding the exclusions will allow you to assess if you are eligible for the insurance.

Vehicles Above 10 Years & Below 1 Year - The benefits of Usage Based Discount insurance are not available if your car is more than ten years old as it is considered old. Newly bought vehicles that are less than one year old are also not considered under the purview of UBD, as the calculation of average kilometres driven is not possible.

*Luxury Vehicles8 - Luxury cars are not eligible for UBD insurance. Vehicles with an Insured Declared Value of more than one crore are not eligible.

Taxi Usage - If a vehicle classifies as a taxi, it is not included in the list of eligible vehicles for Usage Based Discount insurance benefits.

*Used Cars8 - If you purchase a used car, you cannot avail of the benefits of UBD insurance. You must own a first-hand vehicle to get the UBD benefits.

Break-in Period - The break-in period is one of the exclusions as per the terms of TATA AIG UBD. Break-in is the period between your car insurance's expiry date and the date on which you actually renew it. The benefits of the UBD policy are not applicable during the break-in period.

Tata AIG Renewals - UBD policy are not applicable for Tata AIG renewals

If you wish to buy the UBD insurance for your car, you must follow a few simple steps to validate the kilometre. - 

Step 1: Click on the link that you receive through SMS or email and download the TAGIC mobile app on your phone. (Note: The link is valid only for 36 hours)

Step 2: Log in to the app using the registered mobile number. (the number on which the link is received). 

Step 3: Click on video inspection to start capturing the chassis number, engine number and odometer reading. 

Step 4: After the recording is complete, the app will show the process's status as "completed." It will then show the decision as "Approved" or "Pending." 

Step 5: If your video does not upload, you can press the “Retry” option. 

Step 6: Once the video is uploaded, the “complete” dialogue box will appear, followed by the “Approved” or “Pending” status. 

Step 7: You can proceed to make the payment after the status gets updated in the app. 

Things to Remember

• You must update the app without fail for the kilometres validation to take place smoothly. 
• You must ensure that the app captures the odometer reading and not the trip metre. 
• It is important to use one device during the entire process. 
• Do not uninstall the app while the validation process is in progress.

TATA AIGs UBD insurance is an excellent plan for those who do not drive their car regularly. It allows the policyholders to get a discount on the premium of their comprehensive or stand-alone damage policy. However, to avail of the discount, the car’s mileage must be up to 12,000 km. For ultra-high-end cars, this mileage must be up to 5,000 km. The UBD insurance allows you to save on insurance premiums as you pay an amount proportionate to the car usage. It is essential to remember that UBD benefits are not available to certain vehicles, as mentioned above.