Important! What you should know before you renew your insurance (5/5) : Pay per mile insurance
Renewing your 1st class car insurance soon?
When you see prices that are too good to be true, be careful! A few baht saved up front could result in a major cost to you if an accident should happen. The purpose of this series will be to share with you what to look out for to ensure you get the most out of the car insurance that you buy from Carpool or from any broker/insurer.
What is pay per mile insurance?
As the name implies, pay per mile is targeted at motorists that don’t drive a lot. The model is prevalent in the US where policy holders pay a base monthly rate and then a per mile rate when they drive their car. On top of this, more advanced insurers also track your driving behavior and apply a score to your driving (for example, a person that drives fast, brakes hard and performs sharp cornering a lot is likely to have poorer score than someone who doesn’t). The value proposition is quite simple, drive less and drive safe and you pay less in premiums.
To use this type of service, policy holders are usually asked to either install an in-dash device into their onboard diagnostics port (OBD2) of their car or use the GPS on their phone (via an app) to track distance and driving behaviors which is then used to bill the customer on a monthly basis. To date, some of the more popular insurers in the US include Metromile, Snapshot (Progressive) and Esurance (All State).
In Thailand, a similar model has been introduced which embraces the spirit of pay per mile but with some notable distinctions:
Pay per mile has been replaced by pay per minute
Rather than pay per use, you buy packages by number of days insured which also gives you a fixed quota of minutes that you can drive your car
When you drive, you are asked to ‘turn on’ an app they provide – this is used to count the minutes you drive.
Why is this important?
As a fellow company trying to innovate in the Thai insurance market, we are extremely excited when someone challenges the status quo. We think this is a step in the right direction as it adds a fresh perspective on how insurance can be offered.
With that said, there are things that you should think about if you are deciding to use a pay-per-mile insurance scheme for your 1st class insurance:
There is a 5,000 baht deductible applied if you get in an accident and can’t identify the other driver – in light of the generous number of minutes provided in each package we suspect this is how they are able to quote a competitive price
The number of hours allotted per package is equivalent to a maximum of 4.8 hours per day (for the monthly package) and down to 2.6 hours per day (for the 1-year package). For most commuters this is more than sufficient, but if you are a traveling salesman or a delivery person that drives as part of their work, this may not be enough.
If you forget to ‘turn on’ the app, you are covered in case of loss or fire, but won’t be covered if you get into an accident. To avoid forgetting, there is an optional beacon that can be placed in your car which automatically turns on the app for you. But for this to work, you will need to ensure that the app is loaded in background mode, Bluetooth is turned on, and there is a mobile internet connection at all times.
If you run out of miles or your package expires, you will need to top up either thru payment using your credit card, payment at a bank counter, or counter service.
If this seems like a lot of repetitive work to save money, we suggest you check out a normal policy where you can enjoy similar savings if you are willing to opt for a deductible of 5,000 Baht. But if you are like us, and not a big fan of deductibles, you can also check us out, we offer similar levels of potential savings without a deductible.
Carpool helps good drivers save money without compromising on coverage
At Carpool, we believe that good drivers should enjoy peace of mind that you get from comprehensive coverage and still save money too. With our innovative peer-to-peer car insurance offering, good drivers can enjoy up to 30% cash back each year off of already competitive 1st class car insurance premiums. To learn more, please visit us at www.carpool.co.th