Pay-as-You-Go Car Insurance is the Newest Thing
Pay-as-You-Go car insurance is the newest trend to hit the country in a long time when it comes to vehicle coverage. Regular auto insurance means a monthly premium and a yearly policy normally but this will eliminate that for many drivers. This becomes a low cost alternative for those drivers who only operate their vehicles for short distances or just locally.
California is the first state to allow this type of insurance over the whole state and not just in certain areas. This pay-as-you-go car insurance is based loosely on how many miles a driver tells their insurance company that they will be using their vehicle during a specific time, normally one year. The only thing that drivers need to provide is proof of the actual mileage that was driven during this time.
The “Verified Miles Plan” as it is called, will allow drivers who only operate their vehicles short distances to have a cheaper alternative to the standard car insurance available today. This bodes well for senior citizens that only go to the store and run errands rather than taking long trips across the state on a regular basis. The actual monitoring of the mileage will be done by either a third party or an installed GPS device.
This will not only keep the short distance drivers’ rates much lower but will assist in keep the environment clean as well. The plan will allow for purchasing mileage in blocks or groups of a certain amount. This lets a driver choose the coverage for their exact needs, such as 10,000 miles, and that may last them as long as a year in some cases.
By using the pay-as-you-go plan, the environment will benefit as well. Studies show that if just one third of the drivers in California opt for this plan, the emissions will be cut down by 50 million tons of greenhouse gases. While regular car insurance will still be available, this becomes a great alternative to that.
One of the main concerns regarding this is that if GPS is chosen as the preferred method of reporting mileage, do people really want the insurance companies knowing their every move? These devices will not only record the mileage used but locations and speeds as well. This information could possibly be used against a driver at a later date.
Do you really want your insurance company or agent knowing your every move? The insurance companies have to submit all the policy details to the state for the final approval and this type of policy may be offered as soon as January 2009. The program has been available in other states since the beginning of 2009. Prior to the California, the plan took shape in Cleveland, OH and Winston Salem, NC.
Although some critics find the tracking of your driving habits an invasion of privacy, many drivers who actually drive low mileage, will gladly give up the information to insure lower car insurance rates. Is this option for you? After compiling all the information, ask yourself if this option is right for you and your driving habits?
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