Insurance & Risk Consultants

How to Qualify for Affordable Car Insurance Texas Deals with Usage-Based Insurance

If you have only experienced fixed annual premium rates on your car insurance, then you will be delighted to learn that mileage-based insurance can save you heaps of money because it is dependent upon the type of vehicle you drive, measured against time, distance, behavior and place. Unlike traditional insurance, which would basically reward "safe" drivers with lower premiums and/or a no-claims bonus, mileage-based vehicle insurance programs allow drivers to pay their premiums on variable scales dependent upon how much they drive each vehicle.

Passed by the Texas Legislature in 2001, House Bill 45 allows Texas insurance companies to offer mileage-based automobile insurance. However, conventional differentiation is a reflection of history rather than present patterns of behavior. The more you think of the benefits of mileage-based insurance, the more you’ll want to consider exploring affordable car insurance Texas deals on pay as you drive.

To help you find what’s effectively right for you, you’re going to be amazed to discover just how many types of usages there are. Insurance premiums for pay as you drive (PAYD) are calculated dynamically, typically according to the amount driven. And there are three types of usage-based insurance: one that is based on the odometer reading of the vehicle; another based on mileage aggregated from GPS data, or the number of minutes the vehicle is being used as recorded by a vehicle-independent module transmitting data via cell phone or RF technology.

And there’s also the insurance coverage premium based on other data collected from the vehicle, including speed and time-of-day information, historic riskiness of the road, driving actions in addition to distance or time travelled. Using this formula data is collected on the number of miles driven, the type of driving or the identity of the driver. For example, someone is on the road too long without a break, uses their mobile phone while driving, or travels at an excessive speed, can result in extra premium. Some people say that until you’ve tried to find affordable car insurance Texas deals using the mileage-based program, you’ll never really know what you’re missing out on.

I wonder if you’ve noticed that when information on vehicles is automatically transmitted to a system such as this, usage-based insurance becomes all the more easy to calculate because it provides a much more immediate feedback loop to the driver, by changing the cost of insurance dynamically with a change of risk. With this system in place, drivers have a stronger incentive to adopt safer practices. For example, if a commuter switches to public transport or to working from home, this immediately reduces the risk of rush hour accidents.

And needless to say, this reduction would be immediately reflected in the cost of car insurance for that month. If you consider yourself the kind of person that is a low risk driver based on the factors listed above, then to get affordable car insurance Texas deals, usage-based car insurance will be exactly what you’re looking for. If you drive in Texas, it makes perfect sense to explore this option to save money on your car insurance premiums.

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