Auto insurance like fuel or electricity could be paid depending on how much the driver drives. A growing pattern emerging in the auto insurance world is the reduction in premiums for those people who drive a lot less than normal. This usage based auto insurance is becoming quite popular as it lowers the premiums to a significant extent. If an individual qualifies for this kind of usage based insurance, the premium could come down by as much as 10 – 15%. This takes into consideration, the amount of driving actually done by the individual looking for auto insurance. This is becoming an increasingly growing trend when it comes to applying for auto insurance is covered and it seems logical too, as the less you drive, the less risk you pose to the insurance company in terms of claims for coverage.
In case of a lot of companies, if you are riding a bike, you will have to report the amount of mileage you undertake for commuting to work. Therefore for cars, the usage isn’t observed as carefully. The new trend is allowing companies to provide individuals with a very accurate rate for their usage of the vehicle.
Some insurance companies are using the honour system where drivers report their mileage once a year based on what the odometer reads. The rate is adjusted appropriately based on the mileage per year. Some other companies are utilising technology in order to track the mileage and driving habits of the individual. If an individual drives less and drives at safer times of the day, they are likely to get a good discount. People who qualify for these discounts can get their auto premiums reduced on average by up to 15%. The premiums for some drivers could come down by one-third, which represents a significant saving.
Unfortunately for a lot of drivers in Washington, mileage-based policies aren’t not available in the state yet as is the case in California. However, insurance companies report that this is a growing trend across the country as it offers a great incentive to people to leave the car at home more often. There is a pilot project operated by Unigard insurance with King County and Safeco that offers policies based on usage to commercial customers. Progressive is quite popular for individuals, with a program called Snapshot being operated in 29 states, taking into account the usage of the individual.
