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Pay As You Drive – Usage Based Auto Insurance

If you are in need of auto insurance in Texas and trying to save money, you might want to consider Usage Based Insurance. This form of insurance is also known as “Pay As You Drive” (PAYD) or “Pay How You Drive” (PHYD) insurance. Some even refer to it as “Mile Based Auto Insurance” (MBAI). Regardless of the acronym you choose, saving money and being rewarded for driving less is the goal.

Traditional auto insurance in Texas and across the US is based on “risk factors”. These risk factors are risk points that determine how much an individual pays for their auto insurance in Texas. Some factors include to following.

• Age
• Driving Record
• Daily Travel to Work
• Make & Model of Vehicle
• Education Level
• Credit Score

Using historical data, risk factors determine how much your auto insurance premium rates are. The negative to this type of system for the insured, is that it can take a long time to erase the past – if it can be erased at all. With usage based auto insurance in Texas, you are being charged rates based on your current or present patterns of behavior, not the past.

Usage Based Auto Insurance in Texas

There are several forms of usage based auto insurance in Texas, with the simplest being when the insurance cost is based on the number of miles driven. Other methods and measurable factors can also include how far you drive, when and even how fast.

Here are three types of usage based auto insurance Texas residents can use:

• The odometer reading of the vehicle determines the premium coverage amount.
• The amount of minutes the vehicle is used and measured by an APP on your cell phone or RF technology.
• A combination of time of day, distance, time and driving actions.

When the type is determined, it’s easy to add additional parameters such as extra premium costs for driving too long without a break, using your cell phone while driving or driving beyond the speed limit.

Usage based insurance uses a cell phone app to automatically transmit information to the insurer. It is an ever changing dynamic system – constantly changing the cost to the insurer based on immediate driving patterns.

The incentive to drive safely is very high here – and the financial benefits are immediate – each month your insurance costs would be different – and based on how you drove that month.

Reduce Texas auto insurance rates with multi-quotes

As Usage Based Auto Insurance becomes more prevalent, the need to get multiple auto insurance quotes in Texas becomes more necessary. Although Usage Based Auto Insurance rates go up or down depending on how you drive, the base costs will still be different depending on the auto insurance provider.

Using a multi-quote auto insurance tool such as this one, will enable you to enter your information into the websites of up to eight of the top rated Texas auto insurance companies in about 10 minutes. The average saving is up to $500 for those who take the time to do it. Saving $500 in 10 minutes is the equivalent of getting paid $3000 in one hour.

So whether you are specifically looking for Usage Based Auto Insurance in Texas, or trying to find a way to reduce your existing Texas auto insurance rates, using a multi-quote tool will help you get the cheapest Texas auto insurance rates available…taking action and making it happen is up to you.