There is a wide array of insurance policies for a number of activities. Today, in South Africa, there is a new policy that is called pay as you drive which is calculated on a cent per kilometre rate.
With pay as you drive insurance, you pay for a fixed fee per month for insurance thus covering your vehicle up in case of theft, and pay for the number of kilometres that you cover per month. One of the advantages of using pay as you drive insurance is that you will only start to pay once you have gone beyond a certain amount of distance covered. This makes the insurance policy a great one for those who do not drive a lot and there are also different insurance packages with different distance roll deals. Some plans allow you to monitor the distance that you have covered during the first 2 months so that you can know if you are on the right kilometre track or not.
Through the installation of a tracking device in your car, the insurance company can know just how many kilometres you are covering per month. This device can also be used to track your car if it stolen by satellite navigation. While decreasing the recovery time to get your vehicle back, it also reduces your premiums as there are less risks of theft associated with the car. The device is installed in your car (very discretely so that it does not come to the attention of thieves who may then disable it) by a certified tracking company once you have agreed to the policy; your insurance agency will give you details of where and when to get the device installed.
The insurance premium and the set cent per kilometre rate are based on certain factors regarding your profile such as your age, driving record, address, gender and vehicle that you drive. Your final premium will depend on each of these factors which are all equally important.
Pay as you drive insurance is very common in the commercial industry as employers of businesses have a better control on employees using company cars. Their movements can be monitored through the insurance company’s website. Also, if employers are paying for their employees’ fuel, this device can help them to know in how much exactly they have to pay out.
Pay as you drive is a concept that is greatly supported by environmentalists as they believe that if drivers only pay when they have to drive, total carbon monoxide emissions to the atmosphere is reduced and so reducing the environmental problems on earth.