Distance
Distance
Some car insurance plans do not differentiate in regard to how much the car is used. Though popular in America, these aren’t as prevalent amongst UK Policies or no deposit car insurance policies for that mater. However, methods of differentiation would include:
Reasonable estimation
An unverified estimate of the annual distance travelled. A benefit to drivers who use their cars infrequently. It has now actuarial value as the value is unverified.
Tracking based systems
There are a number of systems that are based on tracking the mileage covered by a car. They generally are only available in the USA. They may become available in this country in years to come propogating the spread of no deposit insurance
The odometer based system applies a customer agreed fixed rate per mile. The amount of miles purchased is registered on the cars insurance ID This type of insurance expires once the miles purchased are reached. The customers has an odometer in the car so they can keep track of the amount of insurance they have left. In the event of a officer stopping the driver he can easily identify whether the insurance is still valid by comparing what is on the odometer to the value stated on the id card. This then becomes car insurance without a deposit.
The odometers are subject to tampering. This is a risky and expensive tactic. The car would have to be clocked in order for the insurance to be stolen. Any type of odometer tampering voids the insurance and is punishable by fines and jail.
GPS based tracking is a pilot scheme launched in Texas by Progressive Insurance. Drivers installing a GPS based device that tracked their behaviour recieved a discount in their premium. This tracked their driving behaviour and reported the results to the company via cellular phone. Though this could appear to be an infringement of civil liberties, the policyholders were more concerned by the expense of the device than the invasion of their privacy and their no deposit insurance!
