Everything To Know About Pay-As-You-Drive Auto Insurance

Many people don’t get their cars insured, or even if they are obliged to do so by law, they don’t like paying a fixed premium every month or year for their auto insurance policy.

To overcome this issue, insurance companies have introduced a new auto insurance policy, which is referred to as pay-as-you-drive auto insurance. Let’s take a detailed look at this and how it works.

What is Pay-as-You-Drive Auto Insurance?

Pay-as-you-drive auto insurance enables policyholders to customize their insurance plans as per their driving style and history. This often helps people reduce their premiums.

The safer you drive, the lower your premium charges will be. Your driving style is judged by your past accident records and your license points. Moreover, a person is charged a premium based on how much they’ll drive their car in a certain period.

How Does Pay-as-You-Drive Auto Insurance Work?

The insurance provider maintains specific slabs of distances traveled and charges premiums accordingly. The user will have to declare beforehand how much they expect to drive the car. The duration of the policy usually is one year.

The actual distance the car covers in a specific amount of time while the insurance policy is in effect determines how much premium is charged. If the car travels the distance mentioned in the usage slab, the premium charges are equal to the ones decided in the usage declaration. If the user crosses the usage slab, the premium charges will increase accordingly.

Any other car accident in this period is covered by third-party liability insurance and is a part of the policy. You won’t have to get it separately.

How Does the Insurance Policy Provider Measure the Distance Traveled?

Insurance companies usually ask individuals to install a telematics device on their cars to measure the distance traveled. The telematics device is also connected to a telematics application that can be installed on a user’s mobile phone.

The application provides the user with live data on how much their car has traveled. Moreover, users can also use the application to communicate with their insurance policy providers regarding any issues, queries, and more. Similarly, the insurance provider can also communicate with the policyholder regarding the exhaustion of the usage slab or other concerns.

A person driving a car

If you’re looking for a pay-as-you-drive insurance policy from a reliable auto insurance provider, look no further.

Western Mass Auto Insurance is a trusted insurance provider in Springfield, Massachusetts. Our auto insurance agents can help you get the best personal car insurance policies, including pay-as-you-drive auto insurance policies. Moreover, we also offer home insurance, life insurance, renter’s insurance, and more.

Reach out to us today for further details.