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Car Insurance That Can Pay As You Go
By OnTopic | January 24, 2009
The changing consumer needs have been what many car insurance companies have looked for ways to respond to over the years. Ways to save money on soaring gas prices is what consumers all across the country are desperately seeking. Our finances are now tightly bound by many consumer goods, and among them is the soaring price of gasoline and the costs involved with paying car insurance. Insurance companies have responded to rising prices by creating a new pay as you go insurance program which may offer some financial relief.
Officially called Environmental Defense, the program is used to track an individual’s car mileage. Two ways are proposed to make this work. One method is done by installing a proprietary odometer that contains an embedded cell phone that periodically calls in your mileage to your insurance company.
The other method involves installing a GPS device into a phone in your car, like the On Star system, to reveal your actual travel route. You could probably use a little more information before you make a decision on which method is the one for you.
An imposition on their right to privacy, is one objection to the GPS system that some consumers have. The GPS system may have some certain advantages over the propriety odometer method of tracking mileage; it tells how many miles you travel and also the best time and easiest route to travel. So you need to weigh your privacy concerns against the potential benefits.
A pay as you drive program may help to save money for the consumers and reduce the threat of pollution; this is the belief of the Environmental Defense because insurance companies will offer you incentives for driving less. One benefit of the pay as you drive program would be a reduction in the number of drivers from the already congested streets and highways of the cities where traffic can be a tremendous problem.
Pay as you drive programs could make car insurance more affordable for drivers by giving them some control over their premiums.
It is easy to decide how much can be saved by a pay as you drive program. This type of program would charge part of your annual premium rate into a per mile fee by assigning your car to a group of consumers according to vehicle type and usage and your zip code. You could be responsible for paying an upfront fee for your pre-determined mileage when a per mile rate is determined. 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.
Some auto insurance policy holders are estimated to perhaps be able to receive a savings of about 25% on their auto insurance if they were to use a pay as you drive program.
If our futures can be improved through the pay as you drive programs cutting the cost of insurance and relieving the congestion and pollution on our highways, it will be wonderful.
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