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Should I Sign You Up For Pay As You Go Insurance?

I recently read an article that talked about saving money and one of the ways that was highlighted was PAY AS YOU GO CAR INSURANCE.

Your rates depend on:

    • How much you drive

The article discussed that as job growth stalls, and money is tight, more drivers are warming up to cost-cutting pay-as-you-go car insurance programs. The article said that if you meet all pay-as-you-go requirements, it’s possible to save up to 30% on car insurance premiums.

Two of the nation’s biggest insurers are now responding to this growing demand for pay-as-you-go coverage.

Late last year, State Farm, the country’s largest insurer, introduced a telematics-based effort dubbed In-Drive to drivers in Illinois. Additional states are slated to receive In-Drive in 2012.

Allstate, the nation’s third-largest insurer, recently expanded its Drive Wise pay-as-you-go program to Ohio and Arizona after an earlier rollout in Illinois.

If you join a telematics-based program, you’ll typically be asked to install a device in your car’s diagnostic port (located below the steering column) that records information such as:

  • How many miles you drive
  • How often you brake hard
  • How smoothly you navigate turns

(Funny, a few years ago I presented at a conference the idea that my car gave me a speeding ticket. With this new technology that could be easy to do.)

For those of you who have driven with me, you are probably thinking that I would never qualify to get a discount based on my driving ability – and you are probably right. But let’s get past that and think about the overall concept.

  • Would you install a device that allows your behavior to be monitored and could save you money?

Overall, I do like the concept and I’m very curious. What you think?

  • Have you looked into one of these programs?
  • Do you know anyone who signed up?
  • If it was offered in your state, would this be of interest to you?

I look forward to your thoughts.

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