The changing consumer needs have been what many car insurance companies have looked for ways to respond to over the years. As gas prices continue to soar through the roof, all across the country consumers are desperately looking for ways to save money when fueling their cars. Our finances are now tightly bound by many consumer goods, and among them is the soaring price of gasoline and the costs involved with paying car insurance. A new insurance program from some insurance companies has been created to offer the consumers a pay as you drive which may give some financial relief.
Officially called Environmental Defense, the program is used to track an individual’s car mileage. There are two proposed ways to accomplish this. There is one method done by installing a proprietary odometer in an embedded cell phone that calls in your mileage to the insurance company.
The other method involves installing a GPS device into a phone in your car, like the On Star system, to reveal your actual travel route. You may need some more information to help you decide which of these methods may work for you.
Some consumers object to the GPS system, because they feel that it imposes on their right to privacy. The GPS device has certain advantages over the propriety odometer method of tracking mileage because it not only keeps the mileage count, it also pinpoints your time and route of travel. You should make a comparison of the concerns for privacy and the probable benefits of each method.
A pay as you drive program may help to save money for the consumers and reduce the threat of pollution; this is the belief of the Environmental Defense because insurance companies will offer you incentives for driving less. A reduction in congestion in the overcrowded highways of the cities could be brought about by a reduced number of drivers, so this could be a potential benefit of the pay as you drive program.
Car insurance premiums could be controlled more by the drivers who use the pay as you drive programs and this will make the car insurance more affordable to them.
A pay as you drive program can be simple to judge on how cost effective it is. This type of program would charge part of your annual premium rate into a per mile fee by assigning your car to a group of consumers according to vehicle type and usage and your zip code. You could be responsible for paying an upfront fee for your pre-determined mileage when a per mile rate is determined. The amount of time you spend driving is what determines whether you will receive a rebate or pay more.
It is estimated that this type of program could end up saving some policy holders up to 25 percent on their auto insurance premiums.
If our futures can be improved through the pay as you drive programs cutting the cost of insurance and relieving the congestion and pollution on our highways, it will be wonderful.