Pay Per Mile Car Insurance – There are a lot of ways to save money for example riding the bicycle to work, car-pooling, taking public transport and even walking. Sometimes you may need to take the car to errands and you find other options non feasible. For those that have limited driving, pay per mile car insurance is another option for getting cheapest car insurance.
Advantages of pay per mile car insurance
This concept is great for those that take the cars out for special reasons or have extremely less driving to do. It save s them from paying the full rate as others do for car insurance. It also helps to save pollution as it encourages drivers to drive less.
In fact the Environmental Defence program, which is promoting this new concept, will also provide financial incentives for driving less. In fact this scheme could also see the roads getting decongested by as much as 10-12%.
With less driving, the pollution and the toxins are less. The runoffs on the roads and the impact on the climate are reduced. This concept will also reduce the financial burden on the low-income drivers who have to pay the same amount of car insurance that those with high driving mileage or higher income drivers have to pay.
This is quite unfair to the lower income drivers. It will reduce the number of uninsured or underinsured drivers on the roads.
Since pay per mile car insurance is linked to the number of miles rather than the calendar date, the odometer of the car has to give the insurance company the date that they require. Currently there are two ways to do it.
Keeping track of the mileage
The car insurance company will put in their own odometer that will have an embedded cell phone. This cell phone will call into the car insurance company and tell them about the number of miles that have been covered by the driver.
The other way is to install a GPS device in the car. The advantages of installing a GPS device in the car are many. It also tells the company, the places that the car has driven to and when. Potentially for you as a driver, you can have savings, as it would cost more to drive in peak hours rather than in non-peak hours.
Calculating the cost of pay per mile car insurance
The car insurance company will simply proportionate the annual car insurance premium according to a set number of miles depending on your zip code. You would pay the premium upfront. Depending on how much you drive, the company would ask you to pay excess or give you a rebate.