Pay-as-you-drive Insurance Keeps Expanding In Usa

By Author: Marcus Stalder
Total Articles: 491
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Many people look at all kinds of cost cutting tips when they are trying to trim their insurance premiums. Is that the best option?

What about an entirely different kind of insurance?

This week, Progressive announced that it is adding itself to the growing list of insurance providers offering pay-as-you-drive (PAYD) insurance policies. Many people are able to save hundreds, even thousands, a year in insurance by using PAYD. Could you?
What is Pay-as-you-drive Insurance?

This is a type of usage-based car insurance. It's been used in Europe for a while, but is just now catching on in the United States. Here's how it works:

* You drive
* Your miles are recorded/li>
* Your miles are reported to the insurer
* You pay a flat rate for how many miles you drive

Why is this cheaper?

With traditional auto insurance, you pay a premium for coverage over a set period of time. While rates are partial determined by your annual mileage, many people actually pay far more for coverage than they actual use on the road. Drive 100 miles? Pay for 100 miles. Drive 10, ...
... pay for 10. It's that simple.
By paying by the mile, you pay for exactly what you use. If you barely drive one month, you won't pay much at all.

People who drive less than the average driver can save good money with PAYD. For people who barely drive at all, you can save over a thousand dollars a year.
If you have a bad driving record, PAYD allows you to really control your rate by driving less.
How are miles recorded and reported?

This seems to vary by company. There are several methods:

* Checkups
You check in with an agency approved mechanic, dealer, or agent to have your mileage recorded. They send it to the insurance company, who then send you a bill.
* Honor System
Smaller insurers may simply ask you to look at your odometer and tell them what it says. While it seems like they are just relying on you to be honest - and I'm sure most of you are honest - if the numbers seem off, they will not let it go. Should you file a claim and the insurer find out you've been lying about your mileage, they can drop you and stick you with the bill, claim unpaid.
* Black Box
A black box is a GPS chip that automatically reports the whereabouts of your vehicle to the insurer's computer. This also tracks your mileage automatically.
This also makes it easier to recover a stolen vehicle, which saves the insurer some money. As a result, your theft coverage will be very inexpensive.
* OnStar
PAYD insurance through GMAC for vehicle with OnStar is easy and cheap. OnStar automatically reports your mileage to GMAC. Since it's OnStar, you can talk to an operator at any time to get your current money owed.

How to Find PAYD

Get car insurance quotes to determine the mile-to-mile rates. Car insurance quotes are quick and easy, saving you the time of talking to agents from every company. And since they are free, why not get car insurance quotes today?