If you need the convenience a car provides but are never-the-less a low mileage driver, then a "pay as you drive" insurance policy might suit you down to the ground - and it will save you money enroute!
Pay as you drive policies were introduced some years ago by Norwich Union and they proved popular with its customers, However, Norwich Union subsequently withdrew from the product as costs were found to be too high. Now it seems in the midst of the recessionary days of this year, the whole concept of pay as you drive is being revived. Several big insurance companies are planning to offer it as an option.
To apply for this sort of insurance you need a realistic estimated of your mileage, and be able to break that down between driving at various times of the day and different days of the week. For example; your mileage Monday to Friday between 7.30am to 9.30am and 4.30pm - 6.30pm (those are peak times but excluding bank holidays), and also evenings, nights and weekends (off peak). If after say 2 or 3 months you find that your mileage is less than you initially estimated, (for example, you no longer drive your husband to work each day), your monthly insurance payments will drop, or if you paid in full in advance your overpayment will be refunded. But, if your mileage was grater than you estimated, your payments will increase accordingly.
To operate the system your insurer fits a global positioning system (GPS) into your car. The device is free, but you will be charged an installation fee of around 39 pounds. The insurer is then able to use the GPS to monitor how far you are driving, and at what times of the day and charge you accordingly. This also has a most welcome bi-product - your car now has theft tracking - and up to 98 per cent of stolen cars with GPS are recovered within the day!
Another potential benefit is available if you are a young driver. Some insurers are offering a Young Driver Free Miles bonus. This is being given after a 3-month claim free period. But the insurer is likely to charge young drivers extra for driving between 11.00pm and 6.00am which are classed as 'super peak' periods as those times are generally accepted as representing the most dangerous times for young drivers to be on the road.
You may dislike the idea that your driving movements are being monitored from above - but it could save you a lot of money! And remember, your precious car will now be tracked if it was stolen - and you are highly likely to get it back quickly.
Cheaper premiums should be greatly welcomed by younger drivers who often face huge car insurance premiums. These pay as you go policies will help to save them some serious money. They also encourage them to leave the car at home late at night when they are at greater risk of having an accident.
As with all types of insurance, it is essential to shop around for the best deal. Always use the Internet to find an independent broker who can advise you on the full range of policies available.
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