Car insurance is important to many drivers because it protects them from being financially liable in the event of a car accident. Many car insurance companies are trying to create more innovative and creative programs for their customers. They know that consumers want to pay less for their monthly car insurance premiums. Millions of consumers now search the Internet for their car insurance policies so they have more access to finding ways to save money.

Now, a new idea has come to light and it is called usage based automobile insurance. It caters to motor vehicle operators who do not drive long distances every month.

How much can drivers expect to save with this kind of car insurance? Drivers who qualify for the mileage based program can expect to save between ten and thirty percent per month on their car insurance premiums. This could save people around fifty to one hundred dollars per year depending on the model of the car and the state where the person is insured.

How will car insurance companies monitor the mileage of drivers who are enrolled in usage based car insurance programs? Some smaller insurance companies will rely only on the odometer readings that their policy holders report to them. They are basically relying on their policy holders to be honest in order to adjust their car insurance rates.

Larger car insurance companies such as Progressive will rely on forms of technology to monitor the mileage that is driven by the people that is enrolled in the program. Drivers would plug in a device into their on board diagnostic port. The device is small and square and looks like a garage door opener. Progressive is currently only offering the program to twenty four states thus far. The car insurance program is called “Snapshot”.

Will people be accepted in the program right away? Drivers will typically need to wait at least thirty days before they can be enrolled in the usage based auto insurance program. This is because many car insurance companies want to see how much people actually drive per month before giving them discounted car insurance premiums. People will need to plug in the mileage monitoring device for thirty days straight.

The only thing that is measured is the distance traveled. Most would think that the device would have a global positioning satellite installed on it. Car insurance companies should know if people are driving in areas that are known to be unsafe and have many car thefts. However, with this type of car insurance program where the car travels to and is parked for extended periods of time is not taken into account.

Is speed measured by the mileage monitoring device? No, the device cannot measure how fast a car is going when the device is plugged into the port. Speed is not really a factor in how car insurance policies are assessed. The only issue would be if the driver had a bad driving record. The usage based car insurance program is based solely on mileage but some customers will be paying higher premium rates if their driving records are not up to par.

Drivers should really consider trying to enroll in these programs. Many people especially in places like New York and other states with a lot of forms of mass transportation drive very few miles each month. They can really benefit from the fact that they are helping the environment by using mass transportation and are helping to reduce the likelihood that they will be in an accident because they do not drive very far every day. Consumers should start by looking online for usage based car insurance program and see if their monthly mileage meets the requirement.

Source: komo news