One of the main advantages to a pay as you go insurance policy is that you can top up your insurance as you need it. This means that if you get this type of monthly policy you can pay for that month's premium as a single payment with no long term commitment. That means if you wanted you could get insured for just one month.
Pay as you go car insurance is also called monthly insurance or no deposit car insurance on account of there being no contractual commitments and no deposit. You simply by a months worth of insurance as and when you need it. Being flexible is the main attraction of this type of policy giving you the option of getting insured for short periods of time without the hassle associated with a typical annual car insurance policy.
Besides its flexibility there is another reason that monthly pay as you go policies are attractive to young drivers. Whilst it can be very difficult to get daily car insurance for under 21 year olds it is much easier to get a monthly policy if you are under 21. In fact you can get cover from the age of 17 which makes it an excellent alternative to a daily policy.
Both daily and monthly policies can be bought a month or a day at a time and can be purchased the same way. They are essentially very similar except for similar a few differences. The most obvious is that daily insurance provides coverage anywhere from a single day up to 28 consecutive days. You could of course buy a days cover, leave a few days gap and get another days worth of cover however you generally get a bigger discount the more consecutive days you buy at the same time. For example the daily cost of a 5 day policy will be cheaper than the daily cost of a single days cover.
Monthly insurance can be purchased for a single month or up to 8 months. If you take out 8 consecutive monthly policies ie you renew your monthly policy every month for a total of 8 months then you accrue an additional year of no claims cover. This leads onto the other advantage of pay as you go insurance, you can quickly build up your no claims bonus so as to make an annual policy more affordable.
The other main difference between the two policies is the degree of flexibility. Daily cover tends to be a lot more restrictive than a monthly policy. If you take the age restrictions, daily insurance can only be taken out if you are at least 21 years of age where as a pay as you go policy can be taken out from the age of 17.
Due to the fact a daily policy only earns the insurer a smaller premium compared to a monthly policy whilst being exposed to the same level of risk day cover tend to have more restrictions. This means that a car you are trying to get insured to drive under a daily policy may not be possible where the same car can be covered under a pay as you go option.
There are many advantages to pay as you go insurance over other types. The only down side is that if you are looking to this type of cover as an alternative to daily car insurance you are obviously going to have a minimum commitment of one months cover.
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