Pay as you drive is a Hollard insurance product that relates your monthly car insurance premium to the distance you drive each month, as well as the insured value of your car.
In other words if you take out pay as you
drive insurance the premium will depend on the number of kilometres you drive each month, as opposed to the average number of kilometres driven by the insured car population as whole.
As a result, says Hollard, with pay as you drive insurance, drivers who do not drive many kilometres each month are no longer subsidising those who do. In other words, if you don't drive many kilometres a month such a policy may be for you.
What is pay as you drive?Hollard pay as you drive insurance is split into two halves.
The first half is the fixed premium which is based, as with other car insurances, on the age (and gender?) of the driver and type of vehicle, among other things, and insures you against incidents that occur while the car is not in motion, such as theft.
The second half is calculated based on the number of kilometres you drive every month, so if you drop your children at school a couple of kilometres from home, do shopping at the local supermarket and work from home, you will have lower premiums than someone who drives his or her car thousands of kilometres every month.
The pay as you drive logic is based on the law of averages: the more kilometres a person covers the more chance they have to be in an accident and therefore the higher their premiums will be.
How does pay as you drive insurance work?All Hollard Insurance pay as you drive customers are fitted with a Skytrax GPS tracking device from Tracker. This works in conjunction with Hollard to keep an accurate account of how many kilometres you have driven. The added bonus of the pay as you drive scheme, according to Hollard, is that you must be affiliated with Tracker and so they offer a discounted membership fee. This also means that your vehicle is protected by Tracker giving you greater peace of mind.
Added benefitsHollard states that it does not load your premiums for business use, so a pay as you drive insurance for business vehicles could also be beneficial. Hollard also claims that it does not charge for kilometres driven over 3200 km a month. So you get your first 417 kilometres free, you pay per kilometre up to 3200 kilometres and anything above that is free.
You might benefit from a pay as you drive insurance policy. |
