Pay as you drive motor insurance is relatively new in South Africa, but it has taken the country by storm! People love the idea that if they drive less, they pay less, and also, it seems to be a more fair kind of insurance as you are not going to have to pay one lump sum each month, but rather an amount based on how far you drive.
So what is pay as you drive motor insurance?
Pay as you drive motor insurance is a type of insurance that is based on how far you drive. Firstly, the insurance company will determine your risk profile based on the usual factors such as gender, type of motor vehicle, age and driving history. Then, the cents per kilometre rate will be based on this risk factor. Naturally, there will have to be a small set fee that is paid every month, regardless of how far you drive. This is to cover your vehicle in the case of theft. This small fee will be based on your risk profile, which also includes how much security you have on your vehicle. A good motor insurance company will give you a certain amount of kilometres each month free, and will then only start charging you after you have surpassed that set amount of kilometres.
Pay as you drive motor insurance seems to be a more fair way of insuring your motor vehicle. Some people feel that they deserve a cheaper premium if they do not travel as much as other people, or if their home is close to their work. Others work from home or are elderly and do not travel as much.
Many people wonder how the insurance company knows how far they have travelled each month. The insurance company utilises an efficient tracking system that tracks how many kilometres are travelled each month, and doubles up as security. Because of the tracking system, the insurance premiums can be cheaper because the insurance company knows that if the vehicle is stolen the tracking company will be able to find it. This tracking system will usually be installed free of charge by the insurance company when you sign up for your new pay as you drive policy.
Pay as you drive car insurance is definitely something that people can consider. Most people have a good idea of how many kilometres they travel each month, and will therefore be able to determine how much they will pay in premiums monthly. The insurance company also assists with regards to this, helping the driver determine how far they are travelling and gauging how much they will need to pay. There are even sometimes ways of drivers to keep track of how far they have already travelled each month using a mileage tracker on the pay as you drive company's website. Many businesses like to use pay as you drive insurance for their employees who are driving a company car,
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For more information on the best insurance visit Old Mutual and http://www.payasyoudrive.co.za .
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