AUTO INSURANCE ARTICLE
Save Money with Usage-Based Car Insurance
By: beverlyWe often pay a lot of money to pay for our car insurance even if we are not frequent drivers. Thus, car insurance companies are now offering usage-based car insurance for the advantage of those who doesn’t drive very often. All you need to do is install a device in your car that tracks your driving habits and monitors if you are a safe driver or not.
Insurance companies are required to set their insurance rates based upon certain factors including the number of miles driven by the customer each year. Another Bill passed in California actually allowed car insurance companies to base their rates on mileage information. However, consumer watchdogs are concerned because drivers now have to choose between cheap car insurance rates and protecting their privacy. Thus, insurance commissioners have suggested that consumers will have three options for reporting their mileage.
Why are auto insurance companies looking at mileage now? This is because fewer miles means less chances of having an accident and thus car insurance companies are more likely to offer lower rates for you. Obviously, usage-based car insurance would be favorable for low-mileage drivers. However, if you drive more often you are most likely to get higher auto insurance rates—regardless if you have very good driving habits. It’s not good for people whose jobs require them to travel drive long hours, as they will be charged more for their auto insurance premiums even if they are good drivers. Most people only estimate their mileages and they may end up paying for more than what they really need. If shopping for a usage-based-car insurance it is always worth it to get as many auto insurance quotes as you can. Also ask for discounts available if you drive less than 10,000 per year.
Still, the biggest concern is not how we can implement this, but if people will actually participate. Privacy is a very big issue for the drivers and they are not comfortable with installing a device in their cars that monitors their driving habits. They are also paranoid about other people knowing where they are and when, how fast they drove and how far. Although our transparency and disclosure would greatly increase or lower your car insurance premiums, some people feel that a few dollars’ savings are not worth sacrificing their privacy. On the other hand, usage-based car insurance could be very advantageous for people who have nothing to hide and doesn’t mind being “spied on” about his or her driving habits. They are more likely to really take advantage of the discounted auto insurance quotes that their car insurance companies can provide.