There's a rather cool product in the vehicle insurance market these days. The brand new participant is the pay as you drive auto insurance. It started with one company, Hollard and now other insurance companies are beginning to develop similar packages. Here is how the Hollard pay as drive car insurance policy operates.
The idea is fairly simple. Whenever you take out a Hollard pay as drive car insurance policy you are going to end up paying monthly premiums which are worked out based on the amount which you drive every month. The more you drive the more you have to pay. The concept is fairly easy but the implementation takes a little bit of work.
The very first thing which the actual Hollard pay as drive car insurance policy needed to overcome was how to track the actual kilometres which were driven by a single vehicle in a thirty day period. This was done by installing a monitoring gadget in the vehicle. You have got 2 options for this tracking gadget with Hollard. The main one is actually based on an external organization and gives you all the benefits of an insurance policy with them. You get the automobile monitoring and the recovery service and all the remainder. The other, less expensive option is to install a Hollard supported tracking device that only records kilometres driven. You do not need to be concerned about an invasion of privacy because the insurance provider is only able to get the information on the actual kilometres you have driven.
When you first subscribe to a Hollard pay as drive car insurance policy you have to estimate the number of kilometres that you drive each month. This will tell you exactly what level of insurance plan you have to sign up for. It really is okay should you underestimate as Hollard has made provision for this. Your policy will undergo a probationary time period in which the real number of kilometres driven will be assessed. If you have underestimated the additional kilometres are deducted from a safety net of kilometres that is assigned to you when you start 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're allocated a particular quantity of kilometres per month. If you don't use all of them then they go into a savings account of sorts so that if you exceed those kilometres you may use some of your saved kilometres instead of paying the out of cover price. If you do not have sufficient spare kilometres then you are going to have to pay per kilometre exceeded at a much higher price than your plan price.
The idea is to reward individuals for traveling less through lowing their car insurance premiums. It seems to work pretty well, especially since any extra kilometres are saved for a rainy day when you have to drive more than you normally would and this additional driving would cause you to exceed your monthly allowance of kilometres. So if you drive very little, this may be the insurance policy for you.
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