What the Beebs could learn from the benefits of pay as you drive insurance

| February 18, 2015

Usage-based insurance may also be called telematics or pay-as-you-drive insurance. It is based on a driver's vehicle, hard braking or jack rabbit starts, the distance driven, the time spent driving and the driver's overall behavior. When compared with conventional insurance, this type of coverage is much different. Traditional insurers attempt to reward the drivers they classify as safe, and their assessment is based on the overall history of the and the individual's record. The new method uses current behavior instead of past sins. With the current method, drivers must wait seemingly forever to establish themselves as safe drivers and a short leash to be declared unsafe or a bad risk.. However, the new method does not require as much time for drivers' habits to catch up with them and affect their insurance rates. Even the Beebs can be fixed.

Many transportation and environmental groups approve the new usage-based coverage. They claim it makes people more aware of what they are doing. Insurance companies like Intact offer an automatic 10% discount just for signing up for the program. If you prove to be a good boy or girl they might even reward you with a further discount of 25% after a year of data. For most people, this means they will drive more responsibly. It also encourages people to use their cars only when they need them. For example, driving a few blocks to the grocery store instead of walking would look less tempting with usage-based coverage. Reduce emissions and improve your health.

How am I going to save money!
The simplest form of this type of insurance assesses costs based on the amount of miles driven. When, where and how a person drives may also be factored in with several insurance models. You can track this on your own personalized website. Premium amounts are based on how much a person drives, and coverage is based on the vehicle's odometer. To track how many minutes a car is in use, a vehicle-independent module is used to transmit data using RF technology or cell phone features. The time of day, speeds, distance, driving actions and time traveled are also sent regularly. Beware young people, some parents want this not for driving reasons. Formulas can be basic enough to include only the amount of miles driven. Alternately, they may be much more complex and include a wide array of features. With advanced features, the device is able to determine if a person should pay a higher premium for speeding, using a cellphone while driving or driving for a long period of time without a break.

Another type of system in existence is telematics usage. This system uses a device that immediately relays information as it happens, which keeps a constant feedback loop for drivers. When drivers increase their risks, their premiums change immediately. Although some drivers may think this sounds intimidating, it is actually a helpful way to enforce good driving behavior and make the road safer. The following are benefits of usage-based insurance:

- People are more socially and environmentally responsible.
- Actual risk for each driver is assessed on a more concise and up-to-date basis.
- Consumers enjoy more choices between types of car insurance.
- Responsible drivers can save more money without having to wait to clear old records.
- High-risk drivers pay more, so they are less inclined to spend time on the road.
- For responsible young people, rates are not based on group averages of peers.
- With telematics coverage, continuous tracking may help people who are stranded or hurt.

Key information for those who got this far in this post.

This can only be used to decrease your rate and not increase your rate!!

To learn more about this type of insurance and to find out what options are available, Contact our Team and get your questions answered today! www.bethelinsurance.ca