A new study says that pay as you drive auto insurance is increasing in popularity.
From Autoblog.com: “A survey by Lynx Research Consulting reportedly found that over 33 percent of drivers would consider signing up for a pay-as-you-drive plan, which analysts say can save them five to 30 percent on insurance premiums.” Why is this important? More from Autoblog.com: “the average premium rose 35 percent from 2012 to 2013, according to J.D. Power & Associates.”
This can be good news for consumers. Saving money on car insurance is always a good thing. However, before one jumps on board, make sure that you are still getting the proper insurance limits. It does no good to switch to a plan and then lower your limits so that you “save” even more. Decreasing your limits will cost you more in the long run! Finally, be aware that some policies contain a clause that allow the insurance companies to increase the rates based on where and when you drive.
Pay as you drive insurance may ultimately be a good thing. But consumers need to educate themselves and see if it makes sense for them.