Don't Drive Much? Pay As You Drive Car Insurance Might Save You More

One option that many auto insurance companies are not as interested in, and even some are fighting, but is offered in some places is Pay As You Drive auto insurance. Many people are frustrated with the rising costs of auto insurance and the fact that it is a mandatory part of owning a car today. There are still millions of drivers out there that do not have auto insurance due to its high cost. However, Pay As You Drive auto insurance has been found to be a less expensive alternative to regular auto insurance.

How does Pay as You Drive auto insurance work? It is similar to buying a gift card. You can use the gift card up to the amount you bought it for, and then it is no longer valid. Pay as You Drive auto insurance allows you to purchase a set number of miles for which you are insured, which is a marked difference from paying in installments for a yearly rate of insurance. You are assigned a rate by your zip code, car use, type of car, type of driver, and other information. Your car is then put into a rate group, and then given a yearly amount. That amount is divided by the average number of miles driven for people in your group and then you are given a per mile rate.

The benefits of pay as you drive auto insurance are great for those people who do not drive their cars a lot. For instance, someone who lives in an urban area who may only use their car on weekends, may find this type of auto insurance more beneficial. It allows more freedom for those looking to save on auto insurance. Plus, it allows families to have more cars available, because they do not have to pay a per car premium.

However, there are some downfalls to the pay as you drive auto insurance plans. For the most part, this type of auto insurance does not cover the driver for anything except liability, uninsured driver, collision, and personal injury protection for driving related losses. If your car is damaged while parked or stolen, this insurance will not cover the loss. Also, the insured driver is responsible for monitoring the mileage. It is important to remember that the car is no longer insured once you go even one mile over the number of miles you purchased.

Pay as You Drive auto insurance is not available in all areas, and many insurance companies do not want to offer this insurance, as it often results in significantly reduced payments and a concern that insurance companies will lose jobs and credibility. Yet, states like Texas are leading the way to mandate this insurance be offered, as they are more concerned with the number of uninsured drivers on the road. If insurance is less expensive, more people might be insured.

If you are interested in saving a significant amount of money on a car you don't drive all that much, then Pay As You Drive auto insurance may be an option for you - depending on where you live. First check to see if this type of auto insurance is available in your area. If it is not, then contact your legislator and tell your friends about it. Become a vocal advocate.

However, if you like your coverage in case your car is stolen or damaged by other means than driving, then you may want to reconsider Pay As You Drive auto insurance. Also, if you drive a lot of miles, you may want to think about a regular auto insurance plan or talking about a yearly rate for Pay As You Drive auto insurance. However, no matter what you driving situation may be, it is sometimes nice to have more options for saving when it comes to your auto insurance coverage.

Don't Drive Much? Pay As You Drive Car Insurance Might Save You More

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