Pros and cons of car insurance by the mile
Auto insurance, also called car insurance, is used to cover the cost of repairs when a car is damaged and the medical costs of people injured in a crash. Insurance is not necessarily cheap and is more expensive for inexperienced drivers, older drivers, those who have been in an accident that is considered their fault or drunk driving offenses. Auto insurance is also higher for those who drive more miles per year, live in dense urban areas, and own cars that are popular with car thieves.
Auto insurers have begun to offer mileage insurance as an alternative to standard auto insurance payment methods. However, instead of the old forms that simply ask how far and where you drive each year, they actually record the number of miles driven. Vehicle insurance is then billed based on your risk rate per mile multiplied by the number of miles, along with risk premiums for entering highly dangerous areas.
If the car stays in the garage for a month or in the auto repair shop, the bill will automatically be adjusted downward for the driver in the next billing period. For those who drive only to run local errands or close to home, the rate will be reduced appropriately. This may be a much lower rate than those based on tranches of 10,000 or fewer miles driven per year and more than 10,000 miles driven per year.
A single long trip will increase your car insurance rate, even if the area itself is safe. There are privacy concerns when using the Global Positioning System (GPS) devices that are used for mileage insurance programs. For example, the insurance company now has the means to know that someone drove by and stopped in front of a gentlemen’s club; they get this information by knowing where the car is at all times. Auto insurance mileage information can be used to determine how fast someone was driving. By comparing the miles traveled to the timestamp of the two mileage readings, the average miles per hour calculation can be made. The insurance company may increase rates based on alleged speeding, even if no actual speeding ticket was issued.
