Basic Information On Pay As You Drive Insurance

Pay as you drive insurance is offered by various companies. It is an innovative and simple idea. However, most people are not aware on how it works.

Here, the premium is calculated by evaluating several factors. These include age of the driver, the type of car, physical address and driving history. The premiums are payable in fixed monthly installments, but there is a charge that is calculated based on the mileage.

The insurer installs a tracking device on the vehicle, which also acts as a security measure. It helps the company to locate the car in case it is stolen. The premium is then calculated by charging some amount per mile/kilometer. If you use your car to cover a longer distance, then you have to pay more.

It may be difficult to determine whether this cover is suitable for you. Because the charges apply after a fixed driving distance, one can only pay if they exceed this distance. This can be a viable deal when one does not use the car regularly.

It is beneficial to individuals whose driving style is conservative. This is because it helps them save on premiums as well as maintenance and fuel costs. If one adopts this style, they can also make substantial savings on their transport expenses.

Many companies that cater for employee transport opt for this cover. It helps them to track where the movements of their staff, as in the case of sales persons. Also, the premium remains constant irrespective of whether the vehicle is used for business or personal needs.

Parents who pay for the insurance of their children also prefer this cover. They are able to monitor where their children travel. Pay as you drive insurance is a viable option for drivers who have a good idea on how far they travel every month.