Is Pay-as-You-Drive Insurance for You?
Some progressive companies (ironically, including Progressive itself) have begun offering drivers the opportunity to purchase pay-as-you-drive, or PAYD auto policies. This coverage bases its rates on the driver's habits, as well as the amount of milage driven on a yearly or monthly basis. Here's what you need to consider if you are interested in PAYD automobile coverage:
Safe drivers only: Many of these plans include on-board monitoring of your vehicle and driving practices. Rates stay low for motorists who avoid these hazards, but you can be penalized for excessive breaking, stopping short, and other dangerous habits if they routinely occur. Naturally, driving safely influences your rates in a positive way, since you are less likely to be involved in a collision if you are a studious motorist. However, some individuals object to the idea of monitoring by the insurer, and this is something you may want to consider before signing up for such a policy.
Low miles, low rates: Pay as you drive insurance is great for motorists who frequently use other forms of transportation. For programs like these, the number of miles you drive is recorded and it does have a big influence on your rates. City dwellers, carpoolers, and others who make use of mass transit can often save significant sums, though, since they spend less time in their cars. Logically speaking, auto insurers are less likely to have to pay out a claim for someone who spends little time on the road, and they are happy to pass those savings along to you.
Not everyone is a good candidate for PAYD automobile policies, but if you can reduce your milage and practice good skills, you may really benefit from one. Think of it as saving the earth and saving your piggy bank all at the same time!