Pay Per Use car insurance: understand how it works!

Pay Per Use car insurance can be an interesting option for those who use their car little and want to save money. Find out everything about the subject in the text!

*This text is editorial content and does not guarantee the sale of this product on this website.

This type of car insurance is already quite common in the United States and Europe, but it only recently arrived in Brazil. The first option was the result of a partnership between Thinkseg and Generali, but other companies now offer it as well.

It has attracted attention and has everything it needs to be offered by more insurers over time.

Its operation is simple. Instead of paying conventional (common) insurance, with large monthly payments, the user pays a small amount per kilometer driven.

We explain more about the option throughout the text. Keep reading!

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How Pay Per Use car insurance works

Conventional insurance generally works with an annual contract. The user contacts the insurance company, contracts the protection and pays the premium (amount for contracting).

This premium can often be paid in installments to make payment easier for the consumer. And the protection will be valid for the entire year.

Pay Per Use car insurance works with monthly payments. The user pays a monthly fee to keep their subscription valid. Something similar to Netflix or another subscription service.

Then, when using the car, the insured will pay a fee per kilometer driven with the vehicle. The value is not high, and can represent a great saving for those who use their car little.

How to purchase and use Pay Per Use car insurance?

All insurance contracting and management is done digitally. First, through the insurance company's website.

Then, after taking out insurance, the user downloads the insurance application. The app will record information about how the car is driven, which will affect the cost per kilometer driven.

Aspects such as vehicle acceleration, braking, cell phone use while driving, traffic location and more are evaluated.

When the driver drives prudently, the insurance cost per kilometer driven may be lower. This discount is made using a points system — the better the driving, the higher the score and the greater the discount on protection.

Other insurances also need to be activated for use. This is not the case with the partnership between Thinkseg and Generali, but they may be worth considering.

In these cases, whenever the user leaves home, they activate protection via an app. Only when the insurance is turned on will protect the vehicle. If the consumer forgets this step and suffers an accident, they will have to bear the loss alone.

It is worth mentioning that Pay Per Use car insurance usually has more basic coverage, such as against theft, theft and collision.

For more complete coverage, it may be necessary to negotiate with the insurance company or even take out regular car insurance.

Another highlight of this car insurance is that it usually does not have loyalty. Therefore, the user can cancel it whenever they see fit.

Therefore, if the car remains parked for a long time, is sold, etc., you can cancel the insurance without paying any fines.

Is per-use car insurance worth it?

Many people wonder whether it is worth taking out Pay Per Use car insurance. The answer is: it depends.

It depends, firstly, on how much you use the vehicle. Remember that there will be a fee to be paid per kilometer driven with the car.

Therefore, it is important that the monthly kilometers are few. Otherwise, the cost of protection may be very similar, or even higher than that of ordinary insurance.

This type of “pay as you go” insurance is recommended for vehicles that travel a maximum of 300 km per month.

Another reason why this insurance may or may not be interesting is your type of driving. In common insurance, the driver's type of driving is not assessed. Your profile does, but the insurance company does not “follow” the car’s day-to-day activities.

In Pay Per Use car insurance, it is very common for the insurance company's app to record the type of car driving. Thus, in addition to measuring the kilometers driven, the insurance company can quote the rate that will be paid by the user.

As we have already mentioned, the more prudent your type of driving, the cheaper the insurance can be. And the opposite is also true: the more reckless and the more risky maneuvers you make, the more you will pay.

In other words, if you don't have much caution when driving, Pay Per Use car insurance may not be the cheapest option for your wallet.