What is Pay as You Drive Insurance?
Pay As You Drive insurance rates are based on the number of miles you drive. Simply put, the less you drive, the less you pay for auto insurance. Pay As You Drive ties the vehicle owner?s insurance premiums to how much the driver uses the vehicle. The premiums can be specifically tailored to meet a driver?s needs.
There are several ways of computing Pay As You Drive premiums. You can pay a flat rate for a range of miles, pay on the basis of the number of miles you actually drive during a preset time frame, or pay by the number of hours you drive in a given time period. Pay As You Drive premiums may also be based simply on the miles you drive without a fixed time period.
Since driving distance or driving time sets your insurance rates, your driving has to be monitored. You can get periodic certified odometer readings, or your automobile may be fitted with GPS monitors that upload the vehicle’s computer data.
Mileage monitoring raises some concerns for those considering Pay As You Drive insurance. There are concerns that the devices used to monitor mileage will be used to track when or where a person drives, violating the driver?s privacy. However, that is not something a driver interested in Pay As You Drive insurance should worry about because the monitoring devices focus just on the number of miles driven and nothing else. Privacy concerns are not an issue with Pay As You Drive insurance.
There are several benefits to switching to Pay As You Drive insurance. First of all, your insurance premiums are based on your driving and not other factors like gender, age and where you live. Pay As You Drive insurance also offers an incentive to cut back on the amount of driving you do. Less driving means you will save money not only on your car insurance, but also on gas and auto maintenance and repair, not to mention saving wear and tear on your vehicle. Pay As You Drive insurance is also good for the environment, because less driving means a reduction in auto emissions. There is also less congestion and traffic on the highways and roads.
And Pay As You Drive restores fairness to the insurance system. With Pay As You Drive, low-mileage drivers don’t have to subsidize high-mileage drivers. Under traditional insurance schemes, drivers pay the same premiums whether they drive 200 miles a year or 200,000. Pay As You Drive is an equitable, fairer way of computing your insurance costs. You only have to pay for what you use in the Pay As You Drive system.
According to a report from the Brookings Institution, two-thirds of U.S. households would save an average of $270 a year on auto insurance under a Pay As You Drive insurance system.
If you are interested in learning more about Pay As You Drive insurance, or to see if it is available in your area, contact a qualified insurance provider. He or she can help you tailor a Pay As You Drive insurance program to fit your specific needs.
Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
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