Insurance Determined By How Far You Drive

By Author: Andries Malan
Total Articles: 15
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If you think about it, the less amount of time you spend on the road, the less likely you are to be involved in a car accident.
There are certain employment positions that require one to travel many kilometers each day in order to see as many potential and existing clients as possible. These people; sales representatives, relationship managers and the like, are mostly required to use their own vehicles. In such circumstances, it is obviously very wise to have motor vehicle insurance. The odds of one of these people being involved in a motor vehicle accident are higher than someone who does not spend their whole day driving.

Here is an example of two men. Both are 35-years-old. They both drive a vehicle in the same price range and have lock-up garages. The one man drives fifteen minutes to work each way, whilst the other, a sales representative for an office automation company, is driving at least three hours out of his day. In these circumstances, where both men have an identical standard risk profile, is it fair for them to pay the same insurance premium?

A lot of people don't think so. Many people enjoy ...
... the idea of an insurance company that charges you depending on how much you drive. Therefore if they don't travel too much in a month they are rewarded accordingly by saving money.

Hollard Pay as you Drive Motor Vehicle Insurance is a comprehensive car insurance company that charges a cents per kilometer rate. Therefore if you drive less, you pay less, and vice versa! Hollard Pay as you Drive has a fixed premium calculated on the usual factors such as age, type of vehicle and security for your vehicle. They then use your personal factors to determine your individual cents per kilometer rate.

In order to further entice potential customers, Hollard has offered to only start charging for the month after the customer has traveled more than 417kms.

It may seem confusing as to how they would keep track of how far their customers have traveled each month. One of their advertisements depicts a Hollard employee using a measuring tape around all areas of a city in order to determine how far a client has traveled. Luckily, this was just a gimmick to get the idea recognized. In reality, a Tracker Skytrax GPS system calculates the monthly premium. It also conveniently doubles as a stolen vehicle tracker - something which could be very beneficial to the insurance company in preventing them from having to pay out for a stolen vehicle. As a result of this reassuring factor, Hollard can therefore offer a lower rate.

Some people may be concerned at paying such a variable amount at the end of each month. Many people live on a budget and prefer to know the exact amounts for the bills they will be paying. In this respect, there is peace of mind in that by simply checking the amount of kilometers you have traveled you can calculate how much you will be charged.

On the other hand, perhaps someone who spends a lot of time on the road would have to compare and assess whether this would indeed be a more affordable alternative to regular car insurance. They would need to gauge roughly how many kilometers they would travel in a month. They would then need to decide whether they will actually land up paying more than they would necessarily pay with another 'regular' insurance package.
Andries Malan is the owner of http://www.quantisure.co.za, a website that offers comparitive quotes for the cost conscious car insurance quote shopper in South Africa.