Pay as You Drive
Pay as you drive is a new alternative type of car insurance offered in South Africa and it functions differently from “normal” car insurance as we know it. The basic operational details are as follows:
Your car insurance premium is divided into two different parts. The first part is a fixed premium including a tracking device as stipulated by the insurance company. The fixed part of your premium will further be based on the normal factors used by the insurance industry to calculate an individual premium namely: your age, gender, risk rating of the area where you live, type and age of the car, additional accessories you wich to insure and where you park the car at night.
The variable (adjustable) part of the premium is based on the actual kilometres you drive. Currently, if you travel less than 417 kilometers a month, you will not pay the variable premium, you will only pay the fixed part of the premium. A cent per kilometre insurance costs is also calculated for each individual, according to insurance factors. Your total insurance will be the kilometres you drive monthly, multiplied by your rate per kilometre added to the fixed part of your insurance cover. The maximum limit that you will be charged for is currently 3200 kilometers per month, thereafter you do not pay for additional kilometres travelled.
Business users will pay the same rate and another benefit is that you get the tracking device at a discounted monthly rate. This device also allows you to keep track of your mileage with an online logbook.