A New Type Of Auto Insurance Plan That Might Work For You

Author: Arthur Truax

A new type of auto insurance plan that might work for you

Automobile insurance can make for a considerable headache if you don't carefully choose a coverage plan that works best for your needs. The offerings available from insurance companies in the U.S. are wide-ranging and choosing between them - looking over all of the deductibles, monthly premiums, exclusions and other factors - could end up being a process stressful enough to give you whiplash.

You might want to consider trying a new type of car insurance plan that is growing in popularity. It's being referred to "pay-as-you-drive" (PAYD) auto insurance. The name of this coverage plan is quite literal - a given policyholder's habits would dictate his regular costs based on the number of miles he drives.

Depending on your driving habits, this type of auto insurance might be perfect for you, or it might be completely wrong. If you drive frequently for any reason, for example, a long commute to work or to transport your kids on a regular basis, then this probably isn't right for you - the costs could end up being insurmountable through no fault of your own.

For those who have a car for when they need it but who don't use it regularly, the exact opposite would be true and a PAYD insurance plan is well worth considering. Those who are looking to lower their carbon footprint due to concerns over the environment might also want to give this plan a try, as it effectively constitutes an incentive to drive less.

Many of the major insurance companies, such as State Farm, Allstate and Progressive, provide a PAYD auto coverage option to their customers, so this type of plan likely won't be too hard to seek out. The decision is, of course, up to you in the end. 

How often do you drive? Would this type of insurance plan suit your needs?

In Brief

  • Automobile insurance can make for a considerable headache if you don't carefully choose a coverage plan that works best for your needs.
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