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So How Exactly Does Pay As You Drive Motor Insurance Work?

There’s a rather new product in the vehicle insurance market these days. The new participant is the pay as you drive car insurance. It started with one company, Hollard and today additional insurance providers are beginning to develop similar deals. Here is how the Hollard pay as drive car insurance policy works.

The concept is fairly easy. When you take out a Hollard pay as drive car insurance plan you are going to wind up paying out monthly premiums which are worked out based on the amount which you drive each month. The more you drive the more you have to pay. The idea is pretty easy but the implementation requires a bit of work.

The first thing that the actual Hollard pay as drive car insurance plan needed to overcome was how to monitor the kilometres that were driven by a solitary car in a month. This was made by installing a tracking gadget in the vehicle. You have got two options for this monitoring device with Hollard. The one is supported by an external organization and gives you all the advantages of a policy with them. You get the vehicle monitoring and the recovery service and all of the rest. The other, less expensive option is to set up a Hollard supported monitoring device which only records kilometres driven. You don’t need to be worried about an invasion of privacy because the insurance company is only able to get the info on the actual kilometres you’ve driven.

When you initially sign up for a Hollard pay as drive car insurance policy you need to estimate the number of kilometres that you drive every month. This will tell you what level of insurance policy you need to sign up for. It is okay should you underestimate because hollard has made provision for this. Your policy will go through a probationary period in which the actual number of kilometres driven will be assessed. If you have undervalued the additional kilometres are subtracted from a safety net of kilometres that is allotted to you when you begin the policy. This saves you having to pay at the after plan rate for each kilometre for that first few months.

Once the proper bracket has been decided you are allocated a certain quantity of kilometres each month. if you do not use all of them then they go into a piggy bank of sorts to ensure that if you surpass those kilometres you can use a number of your saved kilometres rather than pay the out of cover price. If you do not have enough extra kilometres then you are going to have to pay per km exceeded at a much higher rate compared to your policy rate.

The idea is to reward individuals for traveling less through lowering their auto insurance premiums. It seems to work pretty well, particularly since any extra kilometres are saved for a rainy day when you have to drive a lot more than you normally would and this extra driving might cause you to exceed your monthly allocation of kilometres. So if you drive not much, this may be the insurance plan for you.

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