Pay-as-You-Go car insurance is the newest trend to hit the country in a long time when it comes to vehicle coverage. Regular auto insurance means a monthly premium and a yearly policy normally but this will eliminate that for many drivers. This becomes a low cost alternative for those drivers who only operate their vehicles for short distances or just locally.
California legislature has approved a new pay-as-you-go car insurance plan that’s partly based on how many miles drivers tell their insurance company they anticipate driving each year. The program is not the first in the country, but is the first time the entire state gets a green light to proceed. However, the catch is that drivers have the burden of proving the estimated miles driven in order to get a discount.
Brand new regulations that were just finalized will permit insurance companies to place more emphasis on the number of miles a person drives. This is in hopes of being a cheaper alternative for drivers who don’t drive long distances. The plan is referred to as the Verified Miles Plan and it states the motorists’ insurance agent, a automobile place, or a GPS-like device will actually read their mileage.
If you aren’t behind the wheel as often then accident rates will reduce, the environment will be cleaner, and insurance rates remain low. This prepaid car insurance plan will allow drivers to purchase miles in bulk instead for a specified amount of time. Someone can purchase 20,000 miles and it may last them anywhere from 6 months to a 2 years.
The Environment Defense Fund (EDF), which tackles the most serious environmental problems, predicts if one third of Californians participate in the pay-as-you-go-plan, over 50 million tons of greenhouse gas emissions can be avoided through 2020. This plan is optional and other more traditional car insurance options will still remain available. However, there are some controversies that come along with the new plan.
By using a GPS unit mounted in the vehicle to track the mileage, this will also let the insurance company know your every move. This can be taken as an invasion of privacy should this information be used against you at a later date. Data that can be monitored by the GPS trackers are such things as location and speeds on the road.
Insurance companies are currently writing up the details of this type of policy for submittal to their respective states. Once these are approved, this type of policy should spread relatively quickly in its availability. Along with California, Cleveland, OH and Winston Salem, NC are utilizing this type of insurance now.
Although some critics find the tracking of your driving habits an invasion of privacy, many drivers who actually drive low mileage, will gladly give up the information to insure lower car insurance rates. Is this option for you? After compiling all the information, ask yourself if this option is right for you and your driving habits?
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