By Leftlane Staff
Saturday, Jan 7th, 2006 @ 12:44 pm

Insurance companies are beginning to introduce Pay-As-You-Drive (“PAYD”) insurance plans that promise reduced rates for infrequent drivers. Unfortunately, the model might not work as well for people who drive often. According to recent research, “a 10% reduction in driving is estimated to result in a 17% decrease in crashes.” That means people who drive only occasionally are viewed as lower risk to insurers than those who drive often. Paying by mileage requires some technology to measure how much you drive. There are two ways of doing this: either installing a proprietary odometer that has an embedded phone to occasionally call in your mileage, or installing a GPS with embedded phone (like OnStar) to report your actual routes.

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