Choosing the right car insurance for you or a new driver can be a daunting task. There are so many companies, all with various options and policies and discounts. Looking at every single one would take forever, and you are not even sure you would be getting the best deal in every scenario. There is one type of car insurance you may want to consider if you do not drive your car a significant distance often. Pay as you go insurance, also known as usage-based insurance, calculates the cost of your insurance based on the number of miles driven.
Usage-based car insurance has three different types of coverage. The first type is based on the odometer reading of your car, so this is based strictly on the miles you drive. The second type is coverage that calculates the amount of time your car is in use, which is monitored by a module that sends data through a cell phone or radio frequency technology. The third type uses other data that is collected from your car, such as speed and information about what time of day you drove your car, as well as distance and length of time driven. Your insurance premium is calculated by one of these types of coverage, so depending on your typical values for each, you may be able to choose which one works out best for you.
Unfortunately, because of the invasive properties of the module that collects data constantly; many people feel that usage-based insurance coverage can cause privacy issues. Knowing that your car is giving information to a company about your driving variables may freak you out, or it may help set your mind at ease if the information is about your new driver teen.
The module installed on your car has GPS technology that can be used to find a vehicle's location after it alerts the company that the car has been in an accident or stolen or has just simply broken down. Your privacy may be at risk, according to t you, but your safety is in good hands if something ever happens while you are driving. For some people, it may be a toss-up which of these factors is more important to them, especially for very safe drivers and very unsafe drivers who are full of themselves.
In any case, knowing about different types of insurance can help you to make the right decision based on your situation. You can certainly understand why some people would lean toward using usage-based insurance, most especially if they wish to save some money and consider themselves to be very safe drivers. Just make sure you know what you are getting yourself into.
These statistics are related to the insurer over a predetermined amount of time. The provider offers a quote based on the data, which may be finalized when the policy comes up for renewal.
Usage-based insurance offers several advantages for both consumer and insurer. It rewards and reinforces good driving habits, something which benefits everybody. It takes the guesswork out of the insurance providers' quotes and offers consumers a simple way of gauging the amount of coverage they need. Because it's based on hard data, it makes car insurance less of a gamble for everyone involved.
The next time you're shopping for insurance quotes, consider whether usage-based insurance might be a good option for someone with your driving patterns. After all, when you're a responsible driver, why hide the fact if it can save you 30 percent on your premium