February 16th, 2016
Ever heard someone say they have “pay as you go car insurance” and have no idea what they’re talking about? The coverage they’re referring to is also known as “usage-based auto insurance” – in which case your premium is calculated based on the amount you drive, or, don’t drive. While this coverage isn’t super common and thus widely offered, it carries plenty of positive effects with it.
Check out a few of them below.
Keeps You Off the Road
Who wants to be on the roadways every day? After all, each day more than 9 people are killed along with another 1,153 people injured due to crashes involving a distracted driver, according to Centers for Disease Control and Prevention. While driving a car is all but unavoidable unless you live in a densely populated urban area, a few less days on the road each week or month can greatly reduce your chances of getting injured or killed. Less time spent on the road means less of your life is spent in traffic. When you’re on a usage-based auto insurance policy, it forces you to restructure your routine and depend less on the need of a vehicle.
Helps the Environment
You’re on the road less, so you’re using less gas, thus emitting less carbon emissions into our sweet, sweet ozone layer. Your contribution may seem like a small amount, but with the amount of vehicles in use all over the world, the idiom “every little bit counts” couldn’t be more accurate.
Extends the Life of Your Vehicle
Even quality vehicles will need more maintenance and repairs as you tack on the miles. Limiting the amount in which you drive on a regular basis because of a pay as you go auto insurance policy could give your vehicles a couple extra years of life, or more. Obviously many of us purchase and operate cars because we need them in our day-to-day lives. But there’s also a large contingent of people owning cars who don’t particularly need them, for example, city slickers with public transportation, a bicycle or rideshare services to easily get to and from place to place.
Probably the most immediate benefit of a pay as you go auto insurance plan is that it’s flat-out cheaper. You’re driving less so you’re not putting as much gas in the tank. You’re also spending less on oil changes and other service maintenance because your vehicle is being driven as much. But above all, your insurance rate is cheaper because your risk assessment as a driver is much lower if you’re only going to be on the road for a specified amount of miles, or days of the week.
Pay as you go auto insurance plans are not without their challenges though. Many insurance providers (particularly some leading companies) shy away from offering these policies because they’re hard to enforce. There’s the option of installing a GPS device into the insured person’s car to track mileage and frequency of driving, but that’s a lot of work to install, track and manage for each usage-based policy issued. But without a GPS or other tracking device, it basically comes down to the integrity of the insured person to be honest about their driving habits.
The bottom line is, unless your car is truly a luxury or supplement to your daily routine, you’re probably much better off getting a regular auto insurance policy so you can operate your vehicle free of limitation. Although we don't yet offer pay as you go insurance, you can find the best auto insurance policies for your situation by using our online insurance portal today!