There is a rather new product in the car insurance market these days. The new player would be the pay as you drive auto insurance. It began with one organization, Hollard and today additional insurance companies are starting to develop similar deals. This is how the actual Hollard pay as drive car insurance policy works.

The idea is fairly easy. Whenever you take out a Hollard pay as drive car insurance plan you are going to end up paying out monthly premiums which are worked out based on the amount which you drive each month. The more you drive the more you have to pay. The concept is fairly easy but the execution requires a little bit of work.

The first thing that the actual Hollard pay as drive car insurance policy needed to overcome was the best way to track the kilometres which were driven by a single car in a thirty day period. This was done by installing a tracking device in the vehicle. You’ve got two choices for this monitoring device with Hollard. The main one is based on an external organization and gives you all the benefits of a policy with them. You get the vehicle monitoring and the recovery service and all the remainder. The other, cheaper choice is to set up a Hollard supported monitoring gadget that only records kilometres driven. You don’t need to be worried about an invasion of personal privacy because the insurance provider is only able to get the info on the kilometres you’ve driven.

When you initially subscribe to the Hollard pay as drive car insurance policy you have to estimate the number of kilometres that you drive each month. This will tell you what level of insurance policy you need to sign up for. It really is okay should you underestimate as Hollard has made provision for this. Your policy will undergo a probationary time period where the real number of kilometres driven is going to be assessed. If you have underestimated the extra kilometres are deducted from a safety net of kilometres that is allotted to you when you begin the policy. This saves you having to pay at the after policy rate per kilometre for that first few months.

When the proper bracket has been decided you are allocated a certain number of kilometres each month. If you do not use all of them then they go into a savings account of sorts to ensure that if you surpass those kilometres you can use some of your saved kilometres rather than pay the out of cover price. If you don’t have sufficient spare kilometres then you’re going to have to pay for each km exceeded at a much higher price than your plan price.

The idea would be to reward individuals for driving less through lowing their car insurance rates. It appears to work pretty well, particularly because any extra kilometres are saved for a rainy day when you have to drive more than you normally would and this extra driving would cause you to exceed your own month-to-month allocation of kilometres. So if you drive not much, this might be the insurance policy for you.

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