Is Prepaid Car Insurance Cheaper?
One of the things that you may have been hearing about lately is prepaid car insurance. What is it and how will it work for you? Get to know all of the details that you want right now.
A lot of people feel that they do not actually need full insurance coverage especially if they do not use their cars often. There is one option that is available for people like them: they can get prepaid car insurance. Have you heard about this before? If it is the first time that you are hearing about it, do not worry because you will know more details about this for sure.
What is Prepaid Car Insurance?
This is a type of car insurance wherein there are various factors and details about you and your driving that will be considered so that you can be given the appropriate car insurance for your needs. The good thing about this is that your car insurance premium can be adjusted depending on what you need.
How Does Prepaid Car Insurance Work?
Prepaid car insurance can only be given to you when you are honest to your insurer about the following details:
- How you drive
- How far you drive
- Your location
There are some insurers that will provide your vehicle with a monitoring device that will be in charge of tracking all of the details that are mentioned above. There are also times when the monitoring device will not be placed on your vehicle directly but on your smartphone. Some monitoring devices will only place the mileage. Some would provide more information such as your current location and the amount of time that you spent driving.
Who Can Get Prepaid Car Insurance?
One thing that you should remember is that prepaid car insurance is not meant to help everyone. Those who use their vehicles regularly cannot get this because they would end up spending more than what they are supposed to pay. This can be more ideal for drivers that are considered to be “high-risk” drivers. You may be wondering, who can be considered as “high-risk” drivers. Basically, these are those who are still young like teenagers. Those who have also received DUIs in the past can also get this type of car insurance.
Types of Prepaid Car Insurance Available
There are different types of prepaid car insurance policies that are available because people will always have different needs. Your choice will depend on how you would like to be monitored by your chosen insurer.
- Pay-Per-Mile Car Insurance
This is the type of car insurance wherein your payment will depend on the mileage that you are going to use every month. The lower your estimated mileage, the lower the car insurance policy premium that will be given to you. This will give insurers more details about how often you drive.
Take note that they would require you to have a GPS tracking device that will provide them with the information that they need regarding how you drive. Sometimes, there are also some fees that are available depending on how you drive.
- Pay-Per-Hour Car Insurance
Instead of your mileage, what the insurers will be looking at is the amount of time that you spend driving. Take note that there will be a flat rate that will be given to your vehicle when you are not using it then there would be extra fees depending on how long you would be driving your vehicle. The tracker can be placed on your car or it might be through your smartphone.
- Telematics Car Insurance
Those who have researched well enough about car insurance will be highly familiar with this. What this monitors is your driving habits. This means that you need to have the black box placed inside your car so that the insurer will know if you have good driving skills or not. There are various things that will be monitored so being a careful driver is a must if you would like to get this type of car insurance.
Take note that the higher your driving score, the better your premium is going to be. It will help to know how to drive properly to make the most out of the premiums that you have to pay.
What is the Coverage of Prepaid Insurance?
You can expect that prepaid car insurance will also have coverage that may be similar to what full insurance coverage can offer. Some of the coverage that you can expect are the following:
- Full comprehensive car insurance will provide the most coverage available which means that it will be in charge of paying for all of the damages that your car has sustained.
- Third-party car insurance is the minimum amount of coverage that you can get when you check out prepaid insurance. It will make sure that any damage that has happened to your vehicle or to the other person involved in the accident will be covered.
- Fire and theft car insurance will obviously have the coverage that you may need in case of a disaster. Your car may catch fire or it may get stolen and you will get the appropriate coverage for it.
It will be up to you to decide if you believe that prepaid car insurance will be ideal for your needs.
