News Developments

An Archive of News and Developments

Auto Insurers Offers Pay-Per-Mile Car Insurance

Comments Off
Posted by Gavin Moodie on November 26, 2012 at 3:12 am

Nowadays insurance companies throughout the United States are adapting new technology to accommodate consumer needs. Many insurers are using electronic system that allows them to monitor their customers and measure the number of miles they have driven. This insurance policy gained more popularity and which is so called ‘pay-as-you-drive’ or ‘pay-per-mile’ car insurance coverage.

Insurers are offering competitive car insurance rates based on the electronic verification of miles driven that is tracked through the GPS system in the car. This is being provided by the trackers to the insurance companies who simply plug into the diagnostic port required on cars. This technology provides fast and reliable tool for customers to compare quotes. The same technology is being used on taxi vehicles that allow insurers to create premiums based on the actual distance traveled.

This type of vehicle insurance coverage is more beneficial to those who don’t use their vehicle often or those who own multiple vehicles. The major benefit is that this plan charges you only for how much you drive. For instance, if you are keeping your driving to a minimum or drive less than 500 miles per month, then you can consider buying ‘pay-per-mile’ plan. But if you drive more than 1,000 miles per month, then you should go for longer period policy.

Thus, a driver who drives less miles a year can get high discount premium rates. However, discounts can vary widely depending on a wide range of driving habits such as

  • If you drive 10,000 or fewer miles a year
  • If you take corners and curves slowly
  • If you drive without exceeding 80 mph
  • If you drive some old model vehicle

So, before going for buying through ‘pay-as-you-drive’ plan, compare the rates and see, if it actually saves your money in the long run. Also, keep in mind, not all states are adapting this technology and for now there are only few insurance companies in some states offering this insurance coverage. As the popularity grows, more auto insurance companies are likely to adapt it.

Both comments and pings are currently closed.