Pay As You Drive Insurance

Pay as you go Car Insurance

Pay as you go Car Insurance

Advertisements for what is known as “pay as you drive” insurance have been increasingly common in the mass media in recent years. For people in the insurance industry, these kinds of policies are referred to as usage-based insurance policies.

A surprising amount of people are unsure about how the policies work and more importantly – are they worth getting?

The concept is pretty simple. You attach a device to your car which normally plugs into the onboard computer of your vehicle if you have one. That device begins to collect data about your driving including speed, usage (on the highway or suburban streets), driving style (are you a lead foot?) and frequency of trips (do you drive once a week or everyday).

This data helps the insurance company understand your usage patterns and they can offer a plan tailor made to your requirements. So far about 1 million vehicles in the United States have these “telematic” devices attached to their vehicles but the number of cars with devices is growing very rapidly. Some of the them are also being used by fleets and governments to track driving ability and performance of their their employees.

At this stage a number of the larger insurance firms are offering this kind of insurance, including Fartford, GMAC, Allstate, State Farm and Progressive insurance. This form of insurance isn’t offered in every state yet though, so you may find yourself out of luck if you live in the wrong state.

Savings

It really depends upon your usage. The insurance companies suggest that most consumers who are good drivers will save between 20 and 50 percent. Some consumers who barely drive their cars or have a small amount of time in the car everyday can save big with this kind of insurance. Some insurance companies have been offering discounts just to install the device, so even if your driving habits don’t get you a significant discount, there is a small one available.

Can it all go wrong?

One question many drivers ask is can they lose money by signing up to a pay as you drive insurance policy? Well according to the insurance companies, the answer is no. Representatives from the insurance companies claim that the programs are simply designed to reward good drivers, not to punish the bad ones.

Critics have suggested that these devices may be somehow used in the future to invalidate insurance claims. For example if your vehicle was traveling 5 miles over the speed limit before an accident, the device might be used to nullify an insurance policy if there is a clause in the insurance policy mentioning vehicle speed. The policies do not do this at the moment, but something to consider for the future.

What do these devices measure?

Most of the devices will measure simple statistics like the time of the trip, the car’s speed and the mileage. However some devices can also measure GPS co-ordinates so they know where the vehicle has been – a concern to some people for privacy reasons.

The devices can even have alerts programmed into them which notify the driver when their speed is excessive. Actually a bonus for some parents concerned about the awareness of their teenage drivers. The more advanced devices with GPS fitted allow a parent to log onto a website and view the location and speed of the vehicle.

Some devices only measure the speed of the vehicle once it reaches a certain threshold, for example the Allstate device only measures speed after 80mph.

If you are an aggressive or frequent driver, there may be little benefit for signing up to a policy with this kind of device.

The devices will benefit drivers who:

  • Are safe drivers who stay within speed limits
  • Have short commutes
  • Don’t drive very often

The devices allow insurance companies to offer some interesting and innovative plans. Some companies have taken to offering cheaper insurance if you drive less often, regardless of distance. They calculate how many times your car has traveled from point A to point B and use that to determine the cost of the policy.

Because some drivers have unusual driving patterns, finding the right policy tailored to your unique style of driving could be a big money saver in the long run.

Obamacare Blamed for Health Insurance Cost Increase

Obamacare

Obamacare

A new report claims that the newly rolled out “Obamacare” health reforms is being blamed for some health insurance cost increases that it has nothing to do with. There have been some issues with the Obamacare rollout, but new research indicates that some parties are incorrectly blaming Obamacare for price increases on their insurance products.

Research indicates that nearly half of the Americans with higher incomes in the $50’000-$75’000 and employer health insurance believe that Obamacare has somehow made them worse off. 46% of the people in this salary bracket say that they are now paying more in out of pocket expenses than they were a year ago.

However insurance industry analysts suggest that this cost increase is actually insurance companies simply charging more and using Obamacare as a scapegoat. Some people are seeing out of pocket expenses like their copay for doctors visits going up rapidly and by as much as 30% in the last year alone. Analysts suggest this is simply insurance companies attempting to get more money out of insured parties to improve their bottom line.

Some cost increases are kicking in before Obamacare has even impacted them. For example the top of the line health insurance plans are blaming a clause in Obamacare which sees the tax rate change to 40% on these types of plans. The plans are being hiked up in cost now to cover this expense, but in reality the cost increase won’t happen until 2018, so the insurance companies are simply price gouging for additional profit on those plans.

With insurance companies acting in this way, it’s no wonder that support for the Obamacare reforms is slipping away. One recent poll indicates that only 38% of people are in favor of keeping the reforms. That is compared to polls a few months ago that indicated 46% support for the reforms.

Critics of the scheme had admitted that some of the worst case scenarios they thought might happen have not come to pass. Despite that the public sentiment is increasingly negative.

A recent survey also found 52 percent of women with employer-based coverage report higher out-of-pocket expenses, compared to only 35 percent of men. This is most because insurance companies were previously allowed to charge women more for insurance than men. Gender discrimination is prohibited under Obamacare, so those statistics are set to change after January 1.

Some analysts are concerned that consumers are unable to assess the Obamacare reforms on their actual merit because of the behavior of some insurance companies.

NYC Disability Insurance Fraud $400 Million!

Disability Insurance Cheats

Disability Insurance Cheats

Many argue that disability insurance fraud has reached epidemic proportions in the United States. Well today, a few hundred disability insurance rorters have been busted in New York City and will no longer be rorting the system

Prosecutors in New York City have announced that as much as $400 million may be getting rorted from the social security disability insurance dating back to 1988.

Some of the rorters have stories that are hard to believe. One person claimed to have a debilitating neck injury but was filmed taking part in a karate instructional video, where he is seen jumping around acrobatically. That particular individual is accused of stealing nearly $500’000 from disability insurance over the past decade.

Others received a few hundred thousand dollars claiming to be too depressed to go outside until they were spotted in photographs deep sea fishing and riding jet skis.

In a revelation that will repulse many people – a number of the people busted for rorting from the insurance funds claimed 911 was the source of their psychological issues.

New York Police Commissioner Bill Bratton said: “As a New Yorker, as a U.S. citizen, I can only express disgust at the actions of the individuals involved in this scheme”

There were a number of ring leaders involved in the rorting and who instructed other people on how to trick physiological and psychiatric tests. The alleged ring leaders were police officers and even a former FBI agent.

Disability rorters cost the insurance industry and governments millions of dollars every year, and also lead to higher insurance premiums for everyone.