As the number of drivers carries on increasing we all realise how vital it is to have good car insurance. Actually, in the UK if your vehicle is uninsured it is considered a major offence. Whether you drive your car daily or only take it out for a Sunday drive, car insurance rates are typically the same. Quite often these rates seem unjustly high.
Even if your car insurance is paid monthly instead of annually, the premiums still make a difference in your monthly budget. Lately, there is a new form of auto insurance being introduced which differs from previous, traditional kinds. This new PAYD Insurance is able to provide significant benefits and savings to certain car drivers.
Pay As You Drive Car Insurance insurance uses the amount of time you spend driving your car to determine how much you pay. Basically the more you drive your car the more you pay for insurance. Premium rates depend on the need for usage, the kind of driver, the level of risk borne while driving as well as the overall level of usage.
People who are concerned about the environment like PAYD insurance because it encourages people to drive less. This also gives you incentive to drive more cautiously. On the whole, this lessens the chance of an accident.
Most Pay As You Drive insurances use the reading on the car’s odometer to determine the mileage the car has travelled in the past year. The insurance rate is then calculated based on that figure. More advanced forms of insurance plans account for risk factors associated with driving and also those which pertain to the users job.
Some insurance companies, like the UK’s Coverbox, install a GPS tracking feature for your safety. At any time this allows them to calculate the mileage used. They also capture when the automobile is in use and can therefore bill cheaper rates during safer times of day. They have premium rates for driver groups at different times. Coverbox sets the insurance rate for Young drivers to its highest amount between the hours of 11 pm and 6 am. This is when most have accidents. The GPS navigation device can additionally serve as a form of security, helping to locate the vehicle quite simply if it ever gets stolen.
One of the problems with GPS tracking as viewed by those being tracked, is that they worry about offences such as speeding, which could later be passed on to police. While the PAYD firms claim they’d never perform this and that the information they gather is done so anonymously, they haven’t convinced a lot of cynical prospective clients.
Examples of PAYD insurance programs include UK’s Coverbox, Australia’s Real Insurance, and Japan’s AIOI which is partnered with GMAC, IRIS, and Toyota. The majority of these insurance policies are either tentative or have been taken off the market due to low demand. But, there are proposals to re-launch PAYD type insurance policies for autos because they are advantageous to drivers as well as the environment.