Overview of pay as you go car insurance
New and younger drivers are statistically more likely to be involved in an accident- according to UK insurers. This is why these type of drivers are faced with increased car insurance premium every now and then.
Today, through technological innovation, a solution that will help bring down the cost of car insurance premiums in the form of pay as you go car insurance, popularly known as Telematic or blackbox insurance has been developed.
In actual fact, pay as you go policy has become one of the most requested short term motor insurance policy by motorists to lower their car insurance premium, although it might not be ideal for everyone.
How it works is that this Telematic technology measures precisely the amount of miles driven and then charge the motorist accordingly. Here is a detail explanation of how it works below:
How does pay as you go car insurance work?
Pay as you go insurance policy only allows you to pay for the miles you’ve driven. The more miles you drive, the higher your premium will be. You can get a quick quote here from eCar insurance. They are known to be one of the cheapest in the industry.
A Telematic tracking gadget (which is a little box the size of a mobile phone) is installed in your vehicle by your insurer. The gadget records every detail about your driving; like your breaking habit, average speed, time of day you usually drive including the amount of miles covered all delivered to your insurer electronically.
A lot of insurers will grant you online access to the information to monitor and observe how well you’re driving. The principle here is that the less mileage you cover, the less chances of you being involved in an accident and requesting a claim, which in turn enable you obtain a cheaper premium.
The insurers involved in Telematic tracking scheme often charge different rates per mileage covered as most insurance companies offer lesser rates to encourage you driving at off peak times where the traffic isn’t much thereby making you less likely to be involved in an accident.
Are there any benefits to pay as you go car insurance?
Primarily, the amount of premium you pay is determined by your perceived risk factors to the insurer- There is nothing like cheapest car insurer. Motor insurance providers utilize the information about you; such as your driving experience, your age, the kind of vehicle you drive, your driving history, your address and vehicle value to ascertain your risk profile as well as how much your premium will be based on.
High performance vehicles with less experienced drivers tend to attract higher premiums because of the high degree of risk they pose in terms of being involved in an accident and also making a claim
Instead of stating assumptions and average statistics on how motorists drive, insurance policies that involves the installation of these boxes in vehicles to monitor your driving behaviour are customized more towards the individual motorist and can therefore make sure your premiums are a lot cheaper.
In addition to this, pay as you go motor insurance gives control of their premium to the drivers because it’s calculated based on the amount of mileage accumulated. And if motorists are concerned about the rising cost of their premiums, all they need to do is to lower their journey or maybe even drive more in off peak times.
Insurers do state and explain the off peak times in their policy- which are usually at night times as well as during the early hours of the morning. This would suit motorist that drive at odd and irregular hours as they need to drive to and from their work place.
If driving very far distances isn’t your style or majority of your driving is within your town and within off peak periods then the pay as you go motor insurance is a great way for you to lower your motor insurance premium.
Things to look out for
The cost and installation of these Telematic devices can often come at a price fixed by the insurer while other insurer bare the full cost of it though it wouldn’t cost as much as the price of an insurance.
One of the few disadvantage of a pay as you go insurance here is when you cover a lot of miles and you cannot afford to reduce or cut back your driving habit, the cover could end up spiralling out of control in terms of costs even more than the traditional policy.
And sometimes this can be out of your control, most importantly, when you’ve just taken on a new job or moved houses that has caused you an even longer journey time, your premium could end up shooting upwards indiscriminately.
In addition to saving money on your pay as you go vehicle insurance, there are other efforts you can put into lowering your premium even further down. And one good way is for you to take the Pass Plus driving exam.
The Pass Plus driving certification is widely accepted by most insurers in the UK. Upon passing the exam, you can be rest assured of getting up to 25% off your premiums because insurers perceive motorists with a pass plus certification to be less of a risk compared to a new or young driver.
Only when you’ve passed your standard driving test and obtained your driving licence can you then take the Pass Plus exam.
The six module course is designed to improve your night-time driving, exercise more duty and care on the roads during terrible weather conditions as these are not included in the standard driving test.
In addition to taking the Pass Plus exam, you could also include an older and experienced driver to the policy as a named driver. The principle here is that since there is an additional driver, you will be spending less time driving which in turn reduces the risk and likelihood of you being involved in an accident and making a claim.
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