Pay As You Go Auto Insurance
By Alisdair Cosgrove
What many of the auto insurance companies have looked for over the years is some way to respond to the changing needs of consumers. Consumers all across the country are looking desperately for some way to save some money on auto fuel as gas prices are soaring. Paying auto insurance in combination with high gas prices can really put our finances in a tight grip. Insurance companies have responded by creating a new insurance program known as a pay as you drive program that could provide policy holders some financial relief.
The pay as you go program is officially called Environmental Defense and its purpose is to track an individual’s car mileage. Two ways are proposed to make this work. There is one method done by installing a proprietary odometer in an embedded cell phone that calls in your mileage to the insurance company.
Another method of tracking an individual’s car mileage involves the installation of a GPS device into a phone in your car, kind of like the On Star system to show the actual travel route taken. If you are indecisive on which method will be for you, maybe you need a bit more information.
An imposition on their right to privacy, is one objection to the GPS system that some consumers have. The GPS system may have some certain advantages over the propriety odometer method of tracking mileage; it tells how many miles you travel and also the best time and easiest route to travel. You should make a comparison of the concerns for privacy and the probable benefits of each method.
The Environmental Defense believes that a pay as you drive program would save consumers money in the long run, and help reduce pollution, as the insurance companies will offer you a financial incentive for driving less. A reduction in congestion in the overcrowded highways of the cities could be brought about by a reduced number of drivers, so this could be a potential benefit of the pay as you drive program.
Auto insurance premiums could be controlled more by the drivers who use the pay as you drive programs and this will make the auto insurance more affordable to them.
It is easy to decide how much can be saved by a pay as you drive program. A part of your annual premium rate would be charged into a per mile fee by assigning your car to a group, according to vehicle type and usage and your zip code. When the per mile rate is determined you may have to pay an upfront fee for your pre-determined mileage. The amount you will have to pay on auto insurance and whether you will receive a rebate or have to pay more, will be determined by the amount of time you spend driving the car.
It is estimated that this type of program could end up saving some policy holders up to 25 percent on their auto insurance.
We must ask ourselves if the pay as you drive auto insurance programs can improve our way of life, through less pollution and congestion and lower costing insurance coverage, what are we waiting for.
About the author
Alisdair Cosgrove has been writing personal finance articles for many years and can find more of his work at the UK
site TheMoneyStop.co.uk, offering best car insurance
and other insurance products including {{{home insurance
quotes|
href="http://www.themoneystop.co.uk/travel-insurance">cheap travel insurance|life insurance. There is also many informative insurance articles
including
href="http://www.themoneystop.co.uk/062008/getting-a-great-deal-on-insurance.html">Getting a great deal on
insurance from http://www.FreeArticlesAndContent.com
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