A motor insurance policy, whereby private car for hire drivers will be able to pay for their insurance according to milage clocked in on paid trips, was announced for GrabCar drivers on 11 May with the aim for savings on premiums to encourage more drivers to join the industry.
The new insurance policy called AXA Pay-As-You-Grab was launched by transport app Grab in collaboration with AXA Insurance Singapore. It is a usage-based policy and is applicable to private car for hire drivers who drive under the GrabCar chauffeur service.
With the reduction of upfront costs, GrabCar drivers who work part-time can expect to save up to 30 per cent off commercial insurance premiums with the new scheme.
Commercial insurance usually costs these drivers between S$2,000 and S$3,500 per year. This amounts to about 30 to 50 per cent more than a regular car insurance policy for private use.
Additionally, the move was also seen as one which would attract new drivers into the private car for hire market. Currently, it is estimated that around 6,000 to 8,000 full-time private hire car drivers are on Singapore roads.
Head of Grab Singapore Lim Kell Jay spoke at the launch event for the AXA Pay-As-You-Grab policy and stated that, “We are making it more affordable for new drivers who may be sitting on the sidelines.”
The AXA Pay-As-You-Grab policy involves policyholders paying a flat rate at 70 per cent of the base premium and another 6 cents per kilometre driven, which is capped at 100 per cent of the base premium.
Milage is measured by the Grab app, and is clocked only when a driver takes on a GrabCar job, and not when he is using the vehicle for personal travel.
The new policy also provides coverage for third-party liability, including for the passenger. In the event of injury or death of a third party, payment can be made in instalments over 12 months. Coverage is also provided in the case of an accident that occurs during a non-GrabCar job.
General Insurance Association of Singapore Chief Executive Derek Teo noted that minimally, the commercial insurance needs to cover bodily injuries of passengers and any third-party coming into contact with the car.
Grab and AXA also aim to encourage safe driving by collecting and assessing anonymised telematics data from Grab’s drivers.