Car Insurance In The Future

Over the last decades the car insurance industry has stayed more or less the same. The Insurance quote you are given is based on statistical data of trends in your target group. This means if you are a young male driver, you're going to be paying a lot more than a middle aged woman. Not because she's necessarily a better driver, but in theory middle aged women drivers are less of a risk than young males.

This might not be the fairest way to give you a quote, but there are not many options out there.

You could sign up to a number of pilot schemes running that could turn the way your car insurance premiums are calculated on their head. Pay per Mile is most likely going to be the fairest way to pay in the future so who does it work.

You start off by installing a small GPS tracker unit in your car, it is likely that the consumer will have to pay for this and then they can go to any insurance company offering pay per mile schemes. This unit will record where you drive, how fast and at what time, you'll then get a monthly bill in the post and you only pay for what you use.

It's very similar to the way mobile phone bills are calculated, there are off peak times, expensive roads, cheap roads etc. You will be paying more to drive in the rush hour because there are more cars around and the risk of an accident is greater. If you drive later at night, you'll pay less, although the details haven't been set in stone yet.

Here are some of the pros and cons of this approach:

Car Insurance Pros:

• You only pay for what you use.
• Could help reduce congestion if people choose to travel out of rush hour.

Car Insurance Cons:

• People who drive for a living will be paying substantially more.
• Is big brother watching you?

There are of course supporters for the old and new systems, but we suspect pay per mile car insurance is going to become the industry standard in the coming years because it's much more accurate.