Having a hard time understanding the ins and outs of how the insurance companies decide on the price of your car insurance policy? Here is a slant that you may not have considered. If at the end of the year, your insurer sees that you haven’t driven very much over the course of the year, they feel you don’t really need to pay them the full price anymore and get a rate cut.
Actually this has been an insurer mainstay for a long time – the low mileage bonus that they can arrive at either by inquiring of you how much you have driven from day to day, or primarily by looking at how long you’ve had the car and how much you’ve driven. Another method of calculation is more accurate and delivers more to you. They’re planning to turn the whole car insurance concept on its head, and they’re going to calculate your premium completely on a per-mile basis.
A usage based car insurance policy is more forgiving if you drive less. And in some places, it goes by the name of PAYD (pay as you drive). This works in effect to turn your auto into a sort of taxicab; they put in a discreetly-mounted meter on your auto that will keep track of exactly how many miles you drive in a year.
Companies like Texas’ Progressive for instance, have been offering Texans a car insurance policy based on the meter called MyRate, for more than ten years now. Now that the trial has worked out, they’re offering it all over the country over this year. Actually, a clutch of states around the South like Alabama, Georgia and Louisiana, and several up North like Michigan, Maryland Oregon already have this option.
When you sign up for a PAYD car insurance policy, the agency sends an installer to place the wireless device on your vehicle. Usually, it finds its home on the underside of the steering column on your car, and it collects more than just how many miles you drive. Pretty often, it records information about your driving style, and how often you use your car. The device uses a wireless connection to the company – where they put your driving information together with other traditional factors that affect your insurance, what your age is, your sex and your driving record, to set up a custom car insurance policy just for you. If you’re someone who doesn’t drive much at all, you could actually shave half off your traditional insurance premium. Get better rates by comparing car insurance premiums today.
If they find out that you are driving at top speed and drive a lot at night when they know that the statistics say most accidents occur, you’ll pay more – about 10% more. One imagines that the wireless connection will also tell them what parts you’re driving in, so that they can tell if your chosen area is high risk or low risk. It will even know if you are speeding one morning, and really stepped on the gas for about 5 seconds to quickly get to 40 mph in just 3 seconds – and man, will you pay. Find the lowest auto insurance rates and compare: buy auto insurance online today.
You’ll soon discover that many auto insurance policy majors are testing out a version of the PAYD scheme now with volunteers and their own unique hardware – Allstate, State Farm, The Hartford – the entire shooting match. This will function to aid people to keep an eye on the way they drive, and cut out wasteful miles. And parents can get an idea as to what their children’s driving habits are like, too.