Pay As You Go Car Insurance
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Pay As You Go Car Insurance
With insurance cover costing more and more every day, many new drivers are considering the Telematics / Pay-as-you-drive/Pay-as-you-go type of insurance. We have listed some of the benefits and disadvantages below.
Pay As You Go Car Insurance
Pay as you go car insurance is basically telematics insurance as it monitors the number of miles covered by the vehicle. The insurer typically installs a “black box” in the vehicle so that satellite technology can track the number of miles. The driver will also have access to an online dashboard which shows them the quality of their driving as the box also monitors the time of the journey, speed, braking and cornering. All these factors have an influence on the premium decided by the insurer.
Companies such as Insurethebox and Coverbox supply the telematics insurance service. They typically have a set amount of miles that they offer to the driver with the optionality to purchase more miles to insure.
Benefits
According to the department for transport, 1 in 5 new drivers are involved in a motor accident within their first year and drivers below the age of 25 tend to be involved in more incidents than driver over the age of 25. Given this fact, the biggest beneficiaries of this type of insurance are young motorist, as the standard comprehensive insurance is too expensive for them.
By choosing to simply drive less and more safely, young motorists can benefit from the Telematics cover as reports have shown that the “black box” has led to a decrease in accidents by 20%. To add, in the unfortunate event that the vehicle is stolen, the black box has a tracking device which means the car can be found very easily.
Disadvantages
Unfortunately, the black box is unable to identify who the different drivers are of the vehicle. So the numerous individuals using the car could all be charged at the same amount as the most expensive driver.
To add, there isn’t an alarm system to let the driver know when they have exceeded their driving miles allowance. So when embarking on a long journey, the driver will need to make sure that they are covered for the full number of miles, clearly a tedious task and if you fail to be attentive then you could be caught out.
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