Pay how you drive insurance is a special type of motor vehicle insurance that takes into consideration how you drive. This simply means your driving habits dictate your premiums i.e. speeding, braking, parking, positioning, stops e.t.c. If you happen to be a rough driver who speeds, breaks suddenly and positions themselves near obstacles/objects, you will obviously pay higher premiums compared to the careful driver who breaks gradually and leaves enough space between the car and objects. Pay how you drive insurance is simply aimed at charging premiums according to individual driving habits. This helps to address the ”unfair” practices of motor insurance where everyone is charged the same premium regardless of how you drive. In principle, you shouldn’t be charged the same premium with someone who is a worse driver than you. Pay how you drive insurance considers all possible factors to ensure car owners are charged fair premiums. 
How pay how you drive insurance works
Pay how you drive insurance policies consider driving skills as their main factor when setting premiums. As mentioned above, if you are a careful driver who brakes gradually and observes speed limits among other rules, you are considered a skilled drive which translates to lower premiums.
Insurers are able to assess your driving skills by installing telematics tracking devices in your car to record driving information i.e. speed, braking, sudden/gradual stops, acceleration, concentration e.t.c. The information is then relayed to your insurer. It is important to note that many insurers offer their clients online access to this data. This helps individuals to monitor their own driving.
The main reason behind driving skills being the main premium determinant is; you are less likely to cause or be involved in accidents if you are a skilled driver. It is important to note that each pay how you drive insurer is at liberty to charge any amount for your premium depending on your driving skills.
Most insurers however set their rates based on your driving skills and the time you are most likely to be driving. Peak times attract higher premiums because there are many vehicles on the roads which increases the probability of getting involved in an accident.
Advantages of pay as you drive insurance
1. Provides useful information: One of the main benefits of pay as you drive insurance is the information collected. Telematic tracking devices collect a lot of vital information i.e. speed, car performance, concentration, braking e.t.c. which helps drivers evaluate their driving skills and take necessary measures to improve their driving.
2. Results in fair premiums: The fact that a driver pays premium based on reasonable parameters i.e. their driving skills and time, makes the amount of premiums charged justified. You pay premiums according to experience which is fair.
3. Makes motor insurance cheaper: For a long time, there was a dilemma on how to make car insurance cheaper. Pay as you drive insurance is an excellent solution to this dilemma. If you want to pay less, drive carefully and gain more experience.
Disadvantages of pay as you drive insurance
1. Can be expensive initially: Although many people assume that pay as you drive insurance is cheap, this might not be the case initially because you have to pay for the telematic device installed in your car. It is however important to note that the long-term benefits outweigh the initial cost.
2. Privacy is a concern for a lot of drivers and it will take time to see how this data is used.
3. Faster drivers or less controlled drivers will certainly end up paying more. Telematics insurance is not designed for boy racers, people who speed a lot, sharp brakers and people with poor driving habits.
