This type of auto insurance can also be called usage-based auto insurance. It is the type of car insurance whereby premium is paid on kilometers you plan to drive or driven. To understand this system properly at Praetorian Insurance, pay as you drive type of car insurance works using odometer and other devices which car owners use to report to their individual auto insurance company. One feature that makes this car insurance type unique is that auto Praetorian insurance company use SMS, email, sticker and another communication device to inform car owners to add (top up) kilometer when they are running out of it.
This type of auto insurance is suitable if;
- You don’t drive often.
- You don’t drive your vehicle to far distance.
- Have more than one vehicle, and you don’t drive one of the cars much.
- Always away for business for weeks or month.
Pay as you drive can be comprehensive, third party, fire, and theft depending on what you want in auto insurance. Most often, while using this type of insurance, if your kilometers finishes, Praetorian insurance automatically switches to either comprehensive, third party or fire and theft type of auto insurance depending on what is stated in the policy before you signed it. This applied if you did not “top up” or add more kilometers to your existing one. Also, unused kilometers which are not utilized are also transferred to the following year so far as you renewed your policy.
There are advantages as well as disadvantages of this type of auto insurance
On the advantageous side, this car insurance type makes you feel you are paying the right car insurance deals when compared to other types of car insurance and is also cheaper to use if you don’t drive often. On the other side, Praetorian advice that pay as you drive car insurance type is not proper to take when driving long distance.
This can make it expensive when compared to other types of car insurance. There are often some limits on usage of this type of vehicle insurance. Such limits include age, (People below 25 years of age are mainly refused this type of car insurance). There is also limitation on kilometers to be purchased during your first purchase.
Calculating How Much You Pay on Pay as You Drive Auto Insurance.
There many factors considered by various auto insurance companies including Praetorian insurance before your rate can be ascertained. Some of these factors have been discussed on how your car insurance rate is calculated. Bearing these factors in mind, what you pay is ascertain by summing minimum premium which car insurance company charges with a prepaid kilometer.
Your risk factor determines the minimum premium
- Take for instance, if you take up comprehensive pay as you drive and
- Plan to drive 7000km. The insurance company may quote $250 as
- Your minimum premium and $0.10 per kilometer.
- You will be paying $250 + (7000km x $0.10) = $950.00
If you increase your kilometers or top up 10000 kilometers with all variables held constant, you will be paying;
- $250 + (10000 km x $0.10) = $1250