Pay As You Go Car Insurance
Many car insurance companies have tried to find ways to respond to the changing needs of consumers, over the years. While fuel prices are on the rise, consumers all across the country are trying to find some way to save money at the pump. The cost of car insurance plus the rising cost of gasoline for our cars has quite a strangle hold on our finances. Insurance companies have responded by creating a new insurance program known as a pay as you drive program that could provide policy holders some financial relief.
The purpose of the program is to track an individual’s car mileage, it is called Environmental Defense officially. Two ways are being proposed to accomplished. The installation of a proprietary odometer that has an embedded cell phone that calls in your mileage to your insurance company from time to time.
The other often used method of tracking mileage, is a GPS device installed in a phone in your car to track the travel route you are taking, much like the On Star system does. You could probably use a little more information before you make a decision on which method is the one for you.
There are some consumers who feel that the GPS system imposes on their right to privacy so they do not want it for this reason. Using the GPS method has its advantages, however, as it not only keeps track of the mileage but it also advises the time to travel and the route to follow. You should make a comparison of the concerns for privacy and the probable benefits of each method.
Since the insurance companies will be offering a financial incentive for driving less, the Environmental Defense thinks that a pay as you drive program will eventually save the consumers money as well as helping to reduce pollution. The pay as you drive program could also reduce the congestion in cities where the highways are overcrowded and the traffic problems are extensive by reducing the number of drivers.
Drivers could gain more control over their car insurance premiums through the pay as you drive programs and thus making car insurance more affordable.
A pay as you drive program can be simple to judge on how cost effective it is. The pay as you drive program would charge part of your annual premium rate into a per mile fee by your car being assigned to a group in accordance with your vehicle type and usage plus your zip code. When the per mile rate is determined you may have to pay an upfront fee for your pre-determined mileage. The amount you will have to pay on car insurance and whether you will receive a rebate or have to pay more, will be determined by the amount of time you spend driving the car.
It has been estimated that some policy holders could receive almost a twenty-five percent savings on their auto insurance costs with this type of program.
We must ask ourselves if the pay as you drive car insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, what are we waiting for.
