Gateway Insurance Company has unveiled a new service that lets vehicle owners pay their premiums depending on how much they use their cars. The product, dubbed, Pay As You Drive (PAYD), allows policy holders to choose Drive Plans which act as insurance bundles used to estimate their annual cover.

“The benefit of PAYD is that the less you drive, the less premiums you pay,” said Walter Okoth, an Actuarial Analyst from the company.

Drive Plans range between 5000 and 18,000 Kilometers. There is also an Unlimited option which gives drivers can choose once they exceed the maximum 18,000 Kilometers.

The Kilometers covered are monitored by a wireless device known as a Mileage Manager. When the driver is left with 1000, 500 and 200 Kilometers, the insurer either calls, texts or sends an e-mail to alert the policy holder. Drivers can then choose to upgrade their policies if they feel the need to increase their mileage.

For a KES 2 million vehicle, the 5000 KM Plan would cost a premium of KES 50,250 while the 18,000 Plan would cost KES 150,000. Policy holders can top up their premiums at their convenience in multiples of KES 1000. Any unused premiums are carried forward to the next insurance period.