Coverage per kilometer represents a real small revolution in the insurance market. Basically, the principle is to pay only for the kilometers driven. The formula is therefore perfect for drivers who travel infrequently or vehicles spared by their owners. In both cases, the classic contribution system turns out to be unsuitable for these situations and is considered wasteful.
What is car insurance per kilometer?
L’car insurance per kilometer means a type of cover for which the premium is assessed according to the distance travelled. This new insurance formula is thus called “Pay as you Drive” in Anglo-Saxon countries. In particular, the phrase can be translated to “pay as much as you drive”. In fact, the cost of your Car insurance will in this case correspond to the kilometers driven.
This type of offer is generally recommended for light riders or vehicles that travel occasionally. Furthermore, the concept comes from a simple observation by professionals in the sector. Some insurance companies have noticed that some households do not systematically use their car on a daily basis. As a result, traditional pricing proves to be punitive for these people who drive little.
To remedy this situation, insurance companies have developed the premium system per kilometer. The idea is to only pay for your car protection when the vehicle is used. Then you can make significant savings in the long run. Originally, the formula was also designed to limit the additional costs associated with novice or at-risk drivers. It then expanded to other profiles.
What are the benefits of this insurance?
Car insurance per kilometer is above all advantageous financially. In fact, you will no longer pay the same amount as a heavy driver or someone who uses their car very often. The shortcomings of pooling also become apparent with the traditional method of calculating premiums. And the imbalance shows up at your expense. SoPay as you Drive offer is of particular interest to:
- Elderly people who drive infrequently and over short distances;
- City dwellers who prefer public transport and driving as a last resort or on weekends;
- Motorhome owners who use their vehicles on an ad hoc basis or only during major holidays;
- Owners of large cars used for vacations and other family outings;
- Drivers who wish to insure an additional car only drive in the event of a breakdown of the main vehicle.
Young drivers also benefit from the bonus per kilometre. With the classic system, they often have to pay a higher premium compared to other drivers. This situation is explained by the significant risks associated with inexperienced drivers. In other words, the insurance companies expect a high accident rate. They therefore apply higher prices to cover any compensation.
What savings on average?
Besides thefuel economythat reduction of the insurance premium represents a promising solution to reduce household expenses. The French also tend to drive less than 10,000 km per year to limit the climate impact of their mobility. In this context, car insurance separates per kilometers stand out as the best opportunity to save more.
According to analysts, this type of formula allows savings of 40% on average on the insurance price. This will allow you to reduce your expenses by up to 400 euros if the prize normally costs 1,000 euros. However, young drivers often have to pay for contracts that reach this price range. They even have to pay much higher prices in some cities.