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Monday, 02 August 2010 02:01
Pay as you go insurance programs
When you get an electric bill, you only get charged for the kilowatts you use. But, when you get your auto insurance bill, you get charged a flat rate for the entire month regardless of how much you drove your car. Why would you want to pay the same premiums as someone who drives 100 miles a week when you only drive 20 miles? That’s where P.A.Y.D.A.Y.S. insurance plans come in.
P.A.Y.D.A.Y.S. insurance stands for pay-as-you-drive-and-you-save. The name is pretty much self-explanatory, but there are a few things behind the inner workings of this unique insurance plan, which has been around since 1929. Basically, you pay a variable rate of insurance based on the miles you drive.
The way insurance companies charge you is with a small device that is installed in your car, which monitors the miles you drive. It has a small transmitter that reports the miles you drive to the insurance company at the time of the month you choose with your provider. You can also opt to install mile meters that will track speed patterns, estimated gas mileage, and there are rumors that GPS will soon be integrated into the meters as well. Unfortunately, the start-up costs of P.A.Y.D.A.Y.S. is a little more expensive because of the cost to install the mile meters. But, there are other benefits to paying as you drive.
One great thing about paying as you drive insurance is that it allows for green incentives for driving less. In Oregon, there is already over $1,000,000 in tax credits for P.A.Y.D.A.Y.S. customers. Also, there is a hypothetical national government program in the works that would pay a 10 percent tax credit to the value of your pay as you drive pricing.
Insurance companies stand to benefit greatly from P.A.Y.D.A.Y.S. as well because, “Companies that do offer P.A.Y.D.A.Y.S. insurance will obtain unique knowledge about claims’ risks for individual drivers,” said Allen Greenberg, Congestion and Management Pricing Team, U.S. Department of Transportation Federal Highway Administration.
The individualized approach of pay-as-you-drive-and-you-save has caught the eye of a lot of Americans lately. By encouraging people to drive less in order to save more money, P.A.Y.D.A.Y.S. is promoting a greener U.S. economy.
P.A.Y.D.A.Y.S. insurance stands for pay-as-you-drive-and-you-save. The name is pretty much self-explanatory, but there are a few things behind the inner workings of this unique insurance plan, which has been around since 1929. Basically, you pay a variable rate of insurance based on the miles you drive.
The way insurance companies charge you is with a small device that is installed in your car, which monitors the miles you drive. It has a small transmitter that reports the miles you drive to the insurance company at the time of the month you choose with your provider. You can also opt to install mile meters that will track speed patterns, estimated gas mileage, and there are rumors that GPS will soon be integrated into the meters as well. Unfortunately, the start-up costs of P.A.Y.D.A.Y.S. is a little more expensive because of the cost to install the mile meters. But, there are other benefits to paying as you drive.
One great thing about paying as you drive insurance is that it allows for green incentives for driving less. In Oregon, there is already over $1,000,000 in tax credits for P.A.Y.D.A.Y.S. customers. Also, there is a hypothetical national government program in the works that would pay a 10 percent tax credit to the value of your pay as you drive pricing.
Insurance companies stand to benefit greatly from P.A.Y.D.A.Y.S. as well because, “Companies that do offer P.A.Y.D.A.Y.S. insurance will obtain unique knowledge about claims’ risks for individual drivers,” said Allen Greenberg, Congestion and Management Pricing Team, U.S. Department of Transportation Federal Highway Administration.
The individualized approach of pay-as-you-drive-and-you-save has caught the eye of a lot of Americans lately. By encouraging people to drive less in order to save more money, P.A.Y.D.A.Y.S. is promoting a greener U.S. economy.
—AJ Register
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Monday, 19 July 2010 23:59
When to consider car rental insurance
When you’re renting a car, you’re invariably asked: “Do you want rental insurance?” Depending on whether or not you carry car insurance at home, what level of insurance you have on your vehicle, and your credit card’s policies, the answer may be yes or no. However, you’re not required to buy insurance to rent a car.
“When renting a car, many consumers purchase unnecessary insurance and end up wasting money. Meanwhile, other drivers inadvertently underinsure their rental car, placing themselves at risk,” Mary Jo Hudson, director of Ohio’s Department of Insurance said.
Some fully-covered automobile insurance policies actually cover your rental with the same level of insurance you have on your vehicle. On the other hand, if you have an older vehicle or the least expensive policies, it likely won’t offer you coverage for renting a car. Similarly most policies in the United States won’t cover you in other countries.
The easiest way to find out if you’re covered when renting a car is to call your car insurer before you get to the rental desk. If you find out that your insurers offer you rental coverage, you probably don’t need to buy additional coverage when you get a rental.
Even if your car insurance won’t cover you, your credit card may. If you find your insurer doesn’t cover you, call your credit card company and ask them what their policy is on covering you. Similarly, if you’re renting a vehicle for business purposes, contact your supervisor or your human resources contacts to find out if your company has a policy on rentals and whether they will cover you.
If none of these offer coverage, or if you think the deductible on your insurance is too high for an accident on a rental, you should consider buying rental insurance. It’s generally only a few more dollars a day and is for that crazy “just in case” incident that you run into in a place you might not know very well.
If you do need rental insurance, they will ask you about various types of insurance. The two to consider are supplemental liability insurance and the collision damage waiver. The damage waiver protects the renter from damage to the vehicle. While liability insurance protects you from causing harm to others while driving the rental vehicle. These policies offer you additional piece of mind when renting cars.
“When renting a car, many consumers purchase unnecessary insurance and end up wasting money. Meanwhile, other drivers inadvertently underinsure their rental car, placing themselves at risk,” Mary Jo Hudson, director of Ohio’s Department of Insurance said.
Some fully-covered automobile insurance policies actually cover your rental with the same level of insurance you have on your vehicle. On the other hand, if you have an older vehicle or the least expensive policies, it likely won’t offer you coverage for renting a car. Similarly most policies in the United States won’t cover you in other countries.
The easiest way to find out if you’re covered when renting a car is to call your car insurer before you get to the rental desk. If you find out that your insurers offer you rental coverage, you probably don’t need to buy additional coverage when you get a rental.
Even if your car insurance won’t cover you, your credit card may. If you find your insurer doesn’t cover you, call your credit card company and ask them what their policy is on covering you. Similarly, if you’re renting a vehicle for business purposes, contact your supervisor or your human resources contacts to find out if your company has a policy on rentals and whether they will cover you.
If none of these offer coverage, or if you think the deductible on your insurance is too high for an accident on a rental, you should consider buying rental insurance. It’s generally only a few more dollars a day and is for that crazy “just in case” incident that you run into in a place you might not know very well.
If you do need rental insurance, they will ask you about various types of insurance. The two to consider are supplemental liability insurance and the collision damage waiver. The damage waiver protects the renter from damage to the vehicle. While liability insurance protects you from causing harm to others while driving the rental vehicle. These policies offer you additional piece of mind when renting cars.
—Chris Meehan
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Saturday, 31 May 2008 02:37
Insurance covers more than you think
When Guinevere Jones’ engine seized, she expected it to cost her a fortune to fix. But her car insurance provider surprised her by not only covering the costs, but also making it easy and “painless.” Jones was driving over a mountain pass in Colorado this spring when she hit a small rock. “Soon after, the oil light started blinking and the car stalled,” Jones said. “The engine seized.”
She spent the next few hours riding home with her friend in a panic, worried about how much it would cost to fix her Volkswagen Jetta or if she would even have to sell it at a loss and shell out a bunch of money for a new car. She wasn’t even sure if her insurance would cover the cost of towing her car to the nearest mechanic shop.
When she called Progressive, however, they said they would pay for the towing and asked if she needed help to file a claim.
Insurance does not normally cover mechanical issues. Unless you buy an expensive and normally-not-very-useful auto repair insurance policy, breakdowns and check-ups are the responsibility—and, sometimes, can be the financial undoing—of vehicle owners.
She spent the next few hours riding home with her friend in a panic, worried about how much it would cost to fix her Volkswagen Jetta or if she would even have to sell it at a loss and shell out a bunch of money for a new car. She wasn’t even sure if her insurance would cover the cost of towing her car to the nearest mechanic shop.
When she called Progressive, however, they said they would pay for the towing and asked if she needed help to file a claim.
Insurance does not normally cover mechanical issues. Unless you buy an expensive and normally-not-very-useful auto repair insurance policy, breakdowns and check-ups are the responsibility—and, sometimes, can be the financial undoing—of vehicle owners.
What most car owners, including Jones, don’t often think about is that many mechanical issues result from collision damage. Because Jones hit a rock that busted her oil pan, the damage to her engine was covered under her comprehensive policy. It’s a loophole that not even many mechanics think to exploit.
A few weeks after the fist repair on the car, Jones discovered that her car was still leaking oil. She took it to her local mechanic and asked him to contact her insurance company for payment. He didn’t want to, Jones said. The mechanic didn’t think there was any chance an insurance company would pay for oil pan and gasket repairs.
“I just begged him to at least try,” she said. “And he ended up saying they were really easy to deal with.”
Jones also discovered through this misadventure that her insurance company pays for a rental car while hers is in the shop.
“You know, when you apply for the policy like five years ago, you forget what benefits you have,” she said.
Six weeks after she ran over a little rock on a mountain highway, her car is on the move again, and she’s only out her deductible.
Jones’ story involves a more obvious collision, but people with alignment and electrical problems that could have resulted from minor collisions should check with their insurers to see if repairs are covered before they pull the money from their own pockets.
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