There appears to be a slight misunderstanding about what the definition of "mileage based car insurance" signifies. A lot of people are under the impression that this policy is making reference to an automobile's age and the number of kilometers on the car's clock. This is in fact not accurate.
Mileage based car insurance is a kind of insurance cover where clientele just have to pay for the kilometers they travel generally each month. This means a client traveling short distances (for instance to work and back again only) don't need to pay the same as a client that travels a huge number of kilometers each week.
The main advantage of mileage based car insurance is that it is a sensible and reasonably priced option for clients who are keen to obtain insurance cover, but reluctant due to the associated costs. Insurance plans are all about risk and an individual that travels less is consequently a lower risk and should be compensated keeping that in mind.
If you are interested in a "pay as you drive" or mileage based car insurance policy, you have to supply your insurance agent or broker with more information on your average month-to-month mileage. Of course this will differ a bit from month to month, but your premiums will be calculated on an average per month.
When you exceed your allowed monthly kilometers, an additional "per kilometer" charge will apply. Simultaneously, should you not use all your allocated kilometers, this can generally be carried over to the next month. This type of insurance can almost be compared to a cellular telephone contract - if you talk more than what your contract permits you will be billed more, but if you have some talking points left by the end of the month you won't waste these points - it will simply be transferred to the next month.
Different mileage based car insurance plans are available, which range from as little as 500km per month to as much as 2000 or more kilometers each month. Your insurance agent or broker will be able to assist you in finding the right plan for your needs and requirements. Stop paying a lot more than you have to!
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