You may not be familiar with pay-as-you-drive car insurance policies. That is to be expected since it is a fairly new type of car coverage. Drivers who want to save costs or simply do not want to pay for insurance when they are not using their vehicles should consider pay-as-you-drive coverage. This type of coverage is particularly advantageous to individuals who work at home or those who rarely drive such as retirees.
This can mean several things. It primarily focuses on the number of miles you drive in a 12-month period. These are actual miles, not estimates. But it can also refer to your driving habits – how, when, and where you travel. Several insurance companies have a system in place in which they install a small GPS tracking device onto your vehicle. As you drive, the GPS collects data and transmits it to your insurance provider. They, in turn, use the information to establish your rates and calculate your monthly bill.
The car insurance industry is built on risk – low risk. It is for this reason that insurance providers like this particular coverage. Pay-as-you-drive consumers generally drive less than the average driver. That alone is a major risk reducer. The less time you are on the road, the less likely you will be involved in a car accident. Additionally, the fact that the GPS is monitoring the way you drive may subconsciously cause you to be more alert and cautious. This makes you a safer driver which, again, reduces your risk rating.
You can get car insurance quotes from insurance companies that offer pay-as-you-drive coverage. Not all companies offer this so you may get fewer quotes than normal. Most of the leading insurance companies will send quotes. In fact, many offer discounts in excessive of 30% for pay-as-you-drive coverage. This is an incentive for you to stay off the road. Not everybody will be eligible for this coverage since older cars cannot support the necessary GPS technology.
Traditional insurance coverage is calculated according to annual estimated miles included in your rate formula. You gave these miles to your insurance agent when you first applied for auto insurance. Drivers do not think to contact their insurance company to notify them of changes in their driving habits. Being able to pay for auto insurance coverage based on the miles you drive can significantly decrease your annual costs. Online car insurance quotes are the best way to get affordable pay-as-you-drive coverage.