Pay as You Drive Car Insurance- a Win-Win Proposition
You can pay as you talk with a cell phone plan, so why not pay
as you drive auto insurance? It sounds like a good idea; but
would pay as you drive auto insurance work for you? The idea
behind pay as you drive auto insurance is simple. Basically its
this- if you do not drive very much, you will not pay high
insurance premiums. Advocates for this type of insurance policy
think that there are many merits to this type of program. What
if you car pool to work, or take public transit? You are not
using your car very much so why are you paying high premiums.
With a pay as you drive auto insurance premiums you would be
able to quite literally pay as you go. Another situation where
this plan would be of benefit is that of many retirees who have
winter homes in temperate climates, the 'snowbirds' living in
Florida or Arizona six months of the year and six months in New
York or Toronto for example. Essentially the insurance companies
would set an average driving amount for each car type. It could
then be broken down into a cents per mile basis. If you wanted
to us the pay as you drive auto insurance system you could
purchase a set number of miles and you would be covered for
insurance during this period. Pay as you drive auto insurance is
an excellent idea for those individuals who do not use their car
very much or try to find cost saving methods or environment
saving alternatives. Currently this type of program is not yet
available, but there are supporters in many states who are
hoping to change that soon. Groups including Environmental
Defense, the Conservation Law Foundation and even the U.S.
Environmental Protection Agency are working to organize a
national cooperative that would work with insurance companies to
offer deep discounts for low-mileage drivers; halfway a step
toward PAYD (Pay As You Drive) insurance. General Motors and
On-Star Offers PAYD Rates. In mid-2004 General Motors Acceptance
Corporation (GMAC) Insurance began offering mileage-based
discounts to OnStar subscribers located in some states. The
OnStar system reports a vehicle's odometer readings at the
beginning and end of the policy term to verify mileage. Motorist
who drive less than specified annual mileage can receive
insurance premium discounts of up to 40%. PAYD programs are also
currently available in Israel, South Africa and Holland. PAYD is
gaining momentum, and will be coming to your area soon.