For those who don't drive much, usage based auto insurance could provide savings. One way to implement pay-as-you-drive insurance is to require the customer to install a device to monitor driving. This is what Progressive's MyRate policy requires, and as mentioned in this CNN article, there are Big Brother concerns. Not only does the device track the number of miles driven, it also monitors how and when you drive. So you don't only receive discounts when you drive less, but also if you have fewer sudden starts and stops, and also if you drive less during high-risk times.
If you can get over the privacy concerns, these pay-as-you-drive policies may do more than just save you money on your car insurance premiums. It'll also encourage you to drive less and drive more carefully. The CNN article cited a study which showed that if people paid for their auto insurance by the mile, the miles driven would decline by 8%.
Unfortunately, adoption of the pay-as-you-drive policies has been slow in the US due to each state having its own requirements. Progressive only offers MyRate in nine states (Alabama, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, and Oregon). Other states are slowly being added.
In addition to Progressive, I mentioned a few other pay-by-the-mile providers in this review of usage based insurance options.
For those in Texas, MileMeter offers per-mile car insurance, and unlike Progressive, they don't install a device to monitor your driving. Miles are based on what you report and on odometer readings from vehicle emission, maintenance, and registration databases. This should remove the privacy concerns, but I wonder if MileMeter will be able to offer as much savings as Progressive's MyRate policy. For those who not only drive fewer miles but also drive safer, it seems the MyRate policy would be able to offer the most savings.
Comments
George@MileMeter
May 30, 2009
I just wanted to respond to your question about the savings that you might receive using MileMeter's distance based pricing.
As far as I know, we are the only company in the world that sells a purely mileage based product. Other insurance companies offer a few incentives if you drive less miles but I don't believe the savings are anywhere near MileMeter's. We have some customers that are reporting anywhere from 25% to 75% savings.
Actual cash savings is important but MileMeter also believes that protecting a persons privacy is serious. I would like you to also know that we do not use any tracking devices or gear that records a clients driving habits or patterns.
You can always go to our website(www.milemeter.com) and play around with various mileage, location and car scenarios to check savings. We firmly believe people respond to incentives and I think you will find that our pricing will give people plenty of reasons to drive fewer miles. Thank you for the mention.....!
George@MileMeter
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Rebecca
July 29, 2009
There is an alternative to the Pay As You Drive model being suggested which allows savings for customers without the privacy concerns.
The model is from an Australian insurance company http://www.payasyoudrive.com.au where customers who do not drive often can make savings without the use of a black box system.
In fact, all customers have to tell the company is their odometer reading at the start of the policy, the insurer has no access to data regarding how or where the customer drives.
This is a legitimate alternative with none of the privacy concerns mentioned above, check it out.
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Marina Wilson
July 14, 2010
The ââ¬Ëpay as you driveââ¬â¢ insurance is really one of the insurance where you can pay only when you drive and this is really very good for those who drive very often. The car insurance provides such schemes where you can pay only when you drive. As you need to install the tracking box/ GPS system this will record the details of the mileage covered by the car and also if in case the car is stolen then this will retrieve with the help of this tracking system. This will also give the details of the driving habits. The insurance company go through the details of the recoded report and this will help you to pay only the mileage you have covered or traveled. carinsurancetemporary.co.uk
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