If you watch cable television, at any time you'll see a slew of cut-rate insurance commercials e.g. Gieco, General, Nationwide, Progressive, etc. Individuals can no longer afford full coverage so these companies offer coverage at the state minimum which brings up an interesting concept for a new type of coverage.
A driver could possibly drive without auto insurance indefinitely as long as they a. don't get pulled over and b. don't get into an accident. It is under these situations when it becomes illegal to be an uninsured driver (it's not illegal until you get caught). My thoughts are that with all this technology why should anyone need to pay per month for auto insurance?
What I'm suggesting is auto insurance coverage only when you need it. Sign up at any time for service on a mobile app, then when/if you get pulled over just confirm the cost of on-demand coverage and get proof of insurance before the police officer is even out of his/her car.
Obviously, the cost of on-demand coverage would be substantial but less than that of the penalty for not being insured.
If an individual drives for 1 year uninsured without ever getting pulled over or in an accident they save around $1,600 (2010 average).
7 comments:
What happens if one gets into an accident (or, additionally, when you get pulled over)? Do you pay the company at that point? How does an insurance company determine what to charge (good drivers vs. bad ones... the actuarial science behind insurance, etc.)?
Okay, let me explain differently, let's say the drive signs up and becomes covered by this insurance agency for free. They can drive fully covered forever and ever but when they need to actually utilize the insurance i.e. providing proof of insurance or crash coverage. The driver is charged a substantial rate. This changes the cash exchange from a monthly payment to an as needed one.
This is the best idea I have ever heard of. I wish this would happen. Car insurance is a joke and they give everyone the run around in time of need but they sure want the fat check every month or they will drop you fast.
Whoops! That message was from me, Bryan...Not Mike.
I concur with Bryan.
I don't quite get this duck. Isn't this basically saying "I'll get insurance when I need it" which is against the whole point of insurance in the first place? I DO agree that this would be awesome but I can't see how the insurance companies would ever allow it, nor the government.
Maybe we can get a lawyer, find a loophole in the law and start our own insurance company.
@Eric So Basically, the driver is covered for free until the insurance service is needed then at that time they are charged a fee for service. This fee for service will undoubtedly be a substantial amount but that's the risk the driver would be take on to possibly save loads of money.
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