Nowadays there are many kinds of car insurance offered by insurance companies. One of them is the pay as you go car insurance. Basically, this insurance works the same way as the pay as you go mobile phones. It is a vehicle insurance program that allows its costumers to pay only when they are using their vehicles. This insurance is specifically designed for the young drivers who often have difficulty to pay their car insurance. By using this insurance, they do not need to worry anymore. They will be charged for the insurance fee based on how much they use their cars.
The pay as you go car insurance was firstly created in the United States and at this time is being offered by Progressive Casualty Insurance Company in Cleveland in 13 states and by GMAC Insurance in North Carolina in multiple states. Some large companies such as the Hartford, Allstate and Unigard also offer this program to their clients. Even more, this kind of insurance has also been used in practice in Canada, United Kingdom, Japan, Africa and Israel.
The pay as you go car insurance works as follow. The driver must put a tracking device in their car, which will track and record the miles they take and send out the data to the insurance company. This device can also function as a monitor that can detect the driver’s location and his driving habits. At the end of the month, he will receive a bill that calculates the journeys he has made. This bill is calculated based on two major factors, which are the time and the road type of the journey. The bill for daytime is higher than the nighttime since the road is more crowded at days and many accidents mostly occur on that time of day. The bill for a vehicle driven in a motorway is also cheaper than that driven in town. Hence, the road you take to travel also influences the bill you will receive.