PAYD Insurance – What Do You Think?

PAYD, or Pay As You Drive Insurance seems to be a trend amongst insurance carriers, and we wanted to find out how our readers feel about this new way to pay.

PAYD insurance adjusts drivers’ insurance rates based on the number of miles driven, and sometimes other factors, giving discounts to those drivers that cover fewer miles, and also giving high mileage drivers higher rates.  This provides an even greater incentive to cut down on mileage (as if the gas prices aren’t enough) which is always good for the environment, but how should those miles be tracked?

There are currently many different tracking devices on the market that record a variety of driver data.  Some track only miles driven, with a device that records the odometer reading and sends the reading directly to the insurance company.  Others can create much more detailed reports that include times of day that miles are driven or speed and distance driven in any given trip, even GPS location.

Right now all the pay as you drive programs available in the US  are optional, so no one is required to submit to a tracking device in order to get insurance, but companies offer considerable discounts for those who opt into such insurance plans.  This is great for those groups who are generally careful drivers.  You and your spouse could save bundles with a pay how you drive plan, but you might want to reconsider if you have teenage drivers who tend to drive faster and brake harder.

So what do you think?  Is it worth giving up another bit of your privacy, in this increasingly public world, or would you rather just pay an averaged rate, and be grouped in with all other drivers?