Infrequent drivers pay less insurance

Source: news.com.au

INFREQUENT drivers can now insure their cars for the kilometres they plan to travel after the launch of the Pay As You Drive (PAYD) insurance policy.

PAYD is the first scheme of its kind in Australia and has been introduced by insurer Real insurance.

It is tailored for good drivers over 25 who spend less time on the road than the average person.

Real Insurance chief executive Roger Grobler says the current car insurance system discriminates against those who drive less.

He said that with high fuel costs, traffic congestion and environmental concerns forcing people off the roads, infrequent drivers should be compensated.

"Low-mileage drivers are simply subsidising insurance costs for high-mileage drivers,'' Mr Grobler said.

"We want to give these people a fair go.

"Pay As You Drive reflects large-scale changes in motoring habits and in so doing, accommodates the changing needs of motorists.''

Unused kilometres can be rolled over year to year or refunded, while new kilometres for top-ups can be purchased over the phone.

If no claim is made for three consecutive years, PAYD customers will receive a 10 per cent rebate of the total premiums paid during that time.

While similar insurance products exist overseas, they require drivers to have their cars equipped with monitoring devices.

PAYD customers report the odometer reading of the car insured.

Real Insurance esimates that significant savings can be made with its product and could be as much $923 compared with an average traditional insurance policy for a 28-year-old male from south-west Sydney driving a $23,000 Holden Astra.

Real Insurance has been operating for three and a half years in Australia and the policy is underwritten by the Hollard Insurance Company.

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