Many business people are in fact clocking up fairly low kilometres
The mileage monitoring that goes with Hollard’s Pay As You Drive motor insurance has blown a motor insurance underwriting assumption out of the water by proving that the ‘business use’ premium loading is often based on a false premise because business people do not all travel further than private vehicle users.
“Before advanced onboard GPS technology gave Hollard a choice, we did what other motor insurance companies do and that is to make assumptions and group people into risk categories.
“One of these groups was people who drive cars for business use. The assumption here was that all business people drive further than ‘private’ users and are therefore exposed to greater risk of accident and theft,” says Zuriel Naiker, Communications Manager at Hollard Insurance.
“This assumed greater risk can carry a premium loading of up to 30% ... and sometimes more. But Hollard’s Pay As You Drive, with its accurate and automatic monitoring of monthly mileage, is proving that many business people are in fact clocking up fairly low kilometres.
“Many business people also use a company car so that their own car is used rarely for business or at weekends. With Hollard’s Pay As You Drive there is no ‘business usage loading’ at all because the focus is on how far you travel and not why – and that’s fair.”
Technology adds benefits
So drivers, both business and private, are reaping new and revolutionary financial rewards and handy services made possible by advanced GPS technology both in lower premiums and other advantages.
Naiker explains that the monitoring device fitted to a vehicle automatically monitors mileage which opens up new opportunities to offer additional services to motorists:
- Fair and transparent premiums for low mileage users, calculated on actual kms travelled
- The less you drive the less you pay
- There is no ‘business loading’ payable with Pay As You Drive because the emphasis is on how far you travel and not the reasons why. Usage has become a non-issue.
- Drastic drop in premium for car owners during periods that they are on holiday without their vehicle
- Tax advantages of having electronic log books available online, accessed through a personal password
- Travelling expense claims are easy to prepare from these online automatic log books
- Evaluating the level of car usage by various family members is also possible through these online logbooks
- The ability to monitor the whereabouts of a car at any time of the day or night can put minds at ease – especially parents with driving age children
- The device is also a tracking system for vehicle retrieval
- There is a panic button inside the car
- Calculating petrol consumption is made simple
What took so long?
It’s about technology, says Naiker. “It is only because of advances in GPS technology that Hollard has been able to design this fully automated Pay As You Drive motor insurance which brings a really fair deal to people who drive less ... and with 21st century style online benefits which were never possible before. Fully automated Pay As You Drive is one of Hollard Insurance’s recent industry firsts.
“Many motorists travel as little as 10 to 20 kms a day. So from a fairness point of view, why should these short-distance drivers pay the same premium as those who travel ten times that distance every day? Thanks to new technology they don’t! “
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