Pay As You Drive Car Insurance

Have you ever thought why you pay more premiums for your car insurance when your mileage is less than your neighbour’s? Don’t you think your car is at a less risk given the fact that you drive only 3000 miles in a year while your neighbour who is of the same age and drives the same car covers more than 12000 miles a year? This is food for thought for you. However do not try to find any logic behind Car Insurance even though motorists in 34 states who drive less pay lower premiums compared to those who drive more. This is called pay-as-you-drive motor insurance.

This type of coverage is also preferred by insurance companies as it helps them to understand the odds that a driver might get involved in an accident. It is also supported by environmentalists as less driving means less pollution and reduced polluted emissions. Pay-as-you-drive also acts as an incentive for people to use their cars less and switch to public transport. For a retired individual it means lot as he can save a lot of money by moving on to pay-as-you-drive policy. By driving less, you can save on gasoline as well as on insurance premium. For a nation, pay-as-you drive helps in saving foreign oil, reduced accidents and little traffic. According to a survey, such savings can benefit a nation of $52 billion a year.

Well there is a hitch in this kind of insurance for insurance companies. How would they record your mileage? Many lawyers feel that some companies can install fashionable GPS devices that can help companies keep a track on the mileage as well as the speed used by the driver. But this is just a temporary problem, and if you have any objection, you need not sign on to it.

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