The Disadvantages of Pay as You Drive Insurance
Pay As You Drive insurance is taking off in popularity. This insurance program is based on the number of miles you drive. The less you drive, the cheaper your insurance premiums. In the current tough economy, the idea of paying less for what can be a big expense is appealing. However, Pay As You Drive Insurance does have some disadvantages.
First off, if you use Pay As You Go, you have to allow your use of your car to be monitored. Monitoring your mileage is not free, and you pay those costs, not the insurance company. Especially if you have a GPS device installed, the costs of monitoring can be greater than the savings in your premiums. Moreover, if you change companies, you will have to change monitoring devices, too. That means you should think twice before you change companies just to get what appears to be a lower rate.
Second, the companies that make the odometer tracking devices often charge a monthly fee for transmitting the data. So, not only do drivers have to pay for the odometer tracking device to participate in a Pay As You Drive insurance program, but they will also have to pay additional fees. Again, this could possibly strip away any savings benefits gained from Pay As You Drive insurance.
Third, the insurance companies have had an opportunity to develop a completely new price structure when they offered Pay As You Go. This has allowed them to pass off new costs to drivers, again, canceling out the benefits of your careful and frugal driving.
Concerns have also been raised about the data gathered by the odometer tracking devices. Supporters of Pay As You Drive insurance claim the devices will only monitor the mileage necessary to compute the Pay As You Drive insurance premiums, but that could easily change. The devices could be revamped to gather additional data on drivers, including whether they drive, when and how often. This data could be then be passed along to the insurance providers, who could possibly use this information to justify rate increases for Pay As You Drive insurance premiums.
Supporters of Pay As You Drive plans assert that driving less will result in fewer accidents. However, the correlation between miles driven and number of accidents is not necessarily simple. Low-mileage drivers are not necessarily safer drivers. It is just as easy for a Pay As You Drive driver to get into a crash as a driver covered by a more traditional insurance program.
At first glance, the promises of lower premiums for Pay As You Drive seem very attractive. If you are considering a Pay As You Drive policy, however, be sure to ask detailed questions of your authorized insurance agent to make sure Pay As You Drive is really right for you.
Tom Martens is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
Getting The Best New Auto Insurance Deal
So you?ve at last bought the new car you always wanted to have, but now you find that you will also have to buy new auto insurance above your monthly car installments. Car insurance is binding in many states, and most financing companies need a least amount of insurance coverage for a new car that you buy.
If you wish to lower your premiums on your new car then the best way out would be to buy a ?safe car?. These cars are called so because they include extra features like air bags and anti-lock brakes, which protect the cars from heavy damages during an accident. Even though the car your buy is not particularly a “safe car”, you may still avail the discount rates by adding some features that the insurance companies look for, in your car.
When thinking about car insurance with a new car you will want to think about what type of model you purchase. All insurance companies use some sort of rating, usually an ISO symbol, which tells the insurer about how much it would cost to fix the vehicle in a crash. Although it is not a set number, it helps the insurer get a general idea while they set your premiums. Sports cars have a much higher rating than your average family vehicle, so be sure to take that into consideration while buying. Even the color of your car plays a small factor towards your premium.
You should never leave a new car uninsured, because if you get into an accident within a week of buying your new car, and are unable to fix the damages; then it would really be terrible. Moreover, most financing companies ask you to get some auto insurance. In case you don?t get it yourself, they get it done for you and charge you with three times the cost.
Really think about what type of coverage you get with your auto insurance. Most people consider liability insurance standard, but you may want to get additional coverage on a new vehicle. What if a driver hits you and they don?t have any type of auto insurance coverage? This is when collision insurance comes in handy.
You must also consider the fact that a brand new car is more vulnerable to vandalism and theft. A sports car is more open to this threat. To safeguard your car from such happenings, you may need a comprehensive insurance, which covers your car for any kind of disaster except car accidents.
Insuring your new car may be costly; therefore it is essential that you include this cost while calculating your expenses. Your insurance company takes into account all factors like your past driving record, credit record, and car-type to determine your risk level as a driver. Drivers can try many ways in order to reduce their premium rates, but for this they may need to do a little research for better quotes and look for the different type of discounts on offer.
Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.
