Pay As You Drive Car Insurance

[insuranceal]

Have you heard of pay as you drive?

In the UK there are only a couple of insurers providing this type of cover. It was trialled by a large insurer then dropped, since then a few small niche insurers have taken up the reigns.

What are your experiences of this type of insurance?
the idea is that you pay depending on how much you drive and at what time. The idea being that you reduce your premiums, it is getting popular amongst young drivers who have particularly high premiums.

A tracker needs to be installed and the cost is picked up by the insurer.

 

[somarco]

It exists here, at least in a few states.

It has several potential problems. Perhaps that is why it has not caught on.

The closest cousin is the insurance some buy when they rent a car.

 

[insuranceal]

When you say potential problems are you talking about theoretical ones or problems that users or insurers are having with it?

 

[djs]

In general, auto insurance works this way. It's more of a marketing gimmick. As far as I know, every carrier charges higher premiums if you drive more, lower premiums if you drive less.

There have been a few attempts at buying insurance when you buy gas (pay at the pump), but that has a few unique problems as well.

Dan

 

[somarco]

When you say potential problems are you talking about theoretical ones or problems that users or insurers are having with it?

Yes, I am.

 

[insuranceal]

There was talk here in the UK about replacing road tax with a higher tax on fuel. It is getting to a situation in the UK where a significant minority of drivers are not insured at all so they have to come up with some way of collecting those premiums.

 

[Mark]

This reminds me of the coverage they offer you when you rent a car.

 

[somarco]

The concept is flawed on many levels, which is one reason why more carriers are not jumping in. We explored this on a couple of forums & blogs at least a year ago. Got some well informed comments from folks in the know. Biggest issue I recall is this.

You prepay by the mile and there is no extension of coverage. Let's say you buy a 2000 mile chunk then have an accident in mile 2001.

No coverage.

 

[insuranceal]

The concept is flawed on many levels, which is one reason why more carriers are not jumping in. We explored this on a couple of forums & blogs at least a year ago. Got some well informed comments from folks in the know. Biggest issue I recall is this.

You prepay by the mile and there is no extension of coverage. Let's say you buy a 2000 mile chunk then have an accident in mile 2001.

No coverage.

That seems like a crazy rule, although the do something similar when you are looking to trade in your car.

 

[mandyjune]

I've heard about this! I'm all for it though because I don't drive that often to work(only about 8 miles) so it'd definitely be advantageous for those who don't drive much like me. Does anyone have any news about it in the States? like which insurance providers might start trying it out, too?