Auto Insurance That You Pay As You Go
In past years, most auto insurance companies have tried to find different ways to respond to changing consumer needs.
Consumers all across the country are looking for some way to save some money on auto fuel as gas prices continue to be very unstable. When high gas prices are combined with paying costly auto insurance premiums, your finances can end up in a crunch.
Insurance companies responded to this situation by establishing a new insurance program which is known as the pay-as-you-drive program or pay-go for short, that could provide policyholders some financial relief by way of discounted auto insurance.
It is interesting to note that the purpose of the program, officially organized by the Environmental Defense, was to record the mileage on a person’s vehicle. Two ways have been suggested for making this work. One method of doing this is accomplished by installing a proprietary odometer with a specialized cell phone that would report the car’s mileage to the insurance company.
The other method to record your mileage would be to install a GPS device into a phone in your car, similar to the On Star system, which reveals your actual travel route. You may need more information to help you choose between these two methods to find the one that will work the best.
Infingements on their right to privacy is one objection to the GPS system that many consumers have voiced. Using the GPS method has its advantages, however, as it not only monitors the mileage but it also advises you about the best time to travel and the easiest route to follow. It is a good idea to compare your privacy issues with the benefits of the two methods.
The insurance companies are hoping that by providing financial incentive for driving less, the Environmental Defense believes that its pay-go program will eventually save the consumers some money as well as help to reduce pollution. Such pioneering insurance programs will help to eliminate congestion in the overcrowded cities since there will be fewer drivers on the streets.
Auto insurance premiums can be made less expensive for the drivers who use the pay as you drive programs.
If you’re interested in learning what savings are available, the pay-go program makes this simple. The program will charge part of your annual premium rate into a per mile fee, by assigning your car to a group, according to your zip code, vehicle type, and how often it is used. You could be responsible for paying an upfront fee for your pre-determined mileage when a per mile rate is estimated.
The amount you will have to pay on auto insurance and whether you will receive a rebate or have to pay more, will be determined by the amount of time you have spent in the car.
There have been calculations that put the savings to policyholders to around 25% on auto insurance coverage using such programs.
If the pay as you drive auto insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, we need to ask ourselves why it is not more widely used.
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