Pay-as-you-go Car Insurance
Pay-as-you-go car insurance is cover on a month-to-month basis. Drivers may cancel it at any time and may reactivate it when they need it. It's ideal for those who need cover for longer than the 1 to 28 days allowed by temporary cover, but who do not need year-round cover on a car.
Who Needs Pay-as-you-go?
Month-to-month cover is perfect for people who will drive a car they don't necessarily own for several months, but not year-round. The classic example is the university student who returns home for holiday and wants to drive his or her parent's car. Another example is the professional who is living away from home for a few months and who needs to drive in that time. Members of the armed forces who may leave the country for long periods might also purchase such a policy because it allows great flexibility. People who know they only drive every few months might even elect to use pay-as-you-go cover for their cars, rather than paying for a full year's policy; they should take care, however. Driving on public roads without insurance is against the law and may carry with it heavy penalties, so motorists must always ensure they have proper cover before getting behind the wheel.
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How to Buy it
Online insurers offer pay-as-you-go cover that drivers may purchase and manage wholly on their websites. Websites offer extensive flexibility – drivers can get quotes, purchase cover, download policy documentation, make changes to the policy, add drivers, and do a myriad other things all from the website, whenever they want. Quotes are valid for 14 days, unless the cover is to begin with those 14 days. In that case, the quote expires the day the cover would have started and drivers would need to re-enter their information to get a new quote. Payments are made electronically, by debit or credit card, and cover begins immediately. The policy then automatically renews every month until the policyholder cancels it. Insurers require a certain number of days' notice when cancelling, after which there are no refunds if one's card is charged.
Drivers have different options based on their needs. They can choose comprehensive, third party fire and theft, or third party only cover. Policyholders may include up to four vehicles on the policy, with up to four named drivers, provided the insurer will accept all the cars and drivers. Some pay-as-you-go schemes even include no claims bonus accelerators, offering a one year bonus after only 8 months of claims free-driving. Once drivers have 5 years – or 40 months – their no claims discount is guaranteed for life with some insurers, although this will not necessarily be accepted by others. Motorists should be sure to read the policy documents; they list numerous exclusions and exceptions, so it's important to know the details of cover.
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