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Pay as You Drive Car Insurance- a Win-Win Proposition
You can pay as you talk with a cell phone plan, so why not payas you drive auto insurance? It sounds like a good idea; butwould pay as you drive auto insurance work for you? The ideabehind pay as you drive auto insurance is simple. Basically itsthis- if you do not drive very much, you will not pay highinsurance premiums. Advocates for this type of insurance policythink that there are many merits to this type of program. Whatif you car pool to work, or take public transit? You are notusing your car very much so why are you paying high premiums.With a pay as you drive auto insurance premiums you would beable to quite literally pay as you go. Another situation wherethis plan would be of benefit is that of many retirees who havewinter homes in temperate climates, the 'snowbirds' living inFlorida or Arizona six months of the year and six months in NewYork or Toronto for example. Essentially the insurance companieswould set an average driving amount for each car type. It couldthen be broken down into a cents per mile basis. If you wantedto us the pay as you drive auto insurance system you couldpurchase a set number of miles and you would be covered forinsurance during this period. Pay as you drive auto insurance isan excellent idea for those individuals who do not use their carvery much or try to find cost saving methods or environmentsaving alternatives. Currently this type of program is not yetavailable, but there are supporters in many states who arehoping to change that soon. Groups including EnvironmentalDefense, the Conservation Law Foundation and even the U.S.Environmental Protection Agency are working to organize anational cooperative that would work with insurance companies tooffer deep discounts for low-mileage drivers; halfway a steptoward PAYD (Pay As You Drive) insurance. General Motors andOn-Star Offers PAYD Rates. In mid-2004 General Motors AcceptanceCorporation (GMAC) Insurance began offering mileage-baseddiscounts to OnStar subscribers located in some states. TheOnStar system reports a vehicle's odometer readings at thebeginning and end of the policy term to verify mileage. Motoristwho drive less than specified annual mileage can receiveinsurance premium discounts of up to 40%. PAYD programs are alsocurrently available in Israel, South Africa and Holland. PAYD isgaining momentum, and will be coming to your area soon.
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