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Pay As You Drive Car Insurance

The state of Texas has a law called ‘Pay as You Drive’. This allows Texas car owners to purchase car insurance on the basis of how many miles they drive per year, which could be significantly less than buying regular insurance coverage. Basically this means that the less someone drives, the lower their insurance rate will be. Of course, the opposite holds true as well. Those that drive more will pay more.

The Pay as You Drive Plan:
Several factors are used by car insurance companies in order to determine the rate that a driver pays for insurance. Those factors include the make and model of car, the zip code in which the driver lives, plus the driver’s driving record. The insurance company determines what group of similar drivers in which to classify the driver then determines the mileage rate for that driver.

For Example:
The group driving plan for a driver is $500.00 per year with an average number of miles driven each year equal to 12,000 miles. The rate for the driver would be 4.1 cents per mile.

The driver could then select to pay for 3,000 miles, which would cost him $123.00 plus some set up fees. Any miles driven over the 3,000 limit would require the driver to purchase more miles ahead of time.

Getting Your State to Allow A Similar Plan:
So how can you get insurance companies in your state to offer such a plan? Call or visit your state legislators; research the pay as you drive plan and let other drivers know about it; find cents-per-mile bumper sticker a for your car and for your friends in order to advertise the option.

 

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