Is pay as you go and hire and reward insurance the same thing?
Is pay as you go and hire and reward insurance the same thing is a good question with a simple answer, yes it is part of it. Technically hire and reward insurance has a category that is classified as pay as you go. What should be noted is that not every hire and reward policy is pay as you go.
What is hire and reward insurance?
Hire and reward insurance is a vehicle policy for those who are delivering a third party’s items to its final destination for a profit. The items being delivered can be food items, parcels and even people. The courier can be either full or part time in their employment to make deliveries.
Professions that need Hire and Reward insurance include fast food and restaurant delivery drivers, package and parcel delivery drivers, Uber and other rideshare drivers along with taxi drivers.
How is pay as you go different than a standard hire for reward policy?
• A standard hire for reward policy has the premium paid monthly quarterly or annually for a set price. The vehicle used to make the deliveries can, but it is not required to have a telemetric device tracking the vehicle.
• The pay as you go hire and reward policy only has this coverage when making a delivery. This is tracked using an app and a telemetric device mounted to the delivery vehicle.
Who uses pay as you go hire and reward insurance?
The pay as you go option is mainly used by young drivers to help reduce the cost of their insurance coverage. These young drivers under 25 who are employed as part time workers for restaurants or business that make deliveries as in fast food restaurants, grocery stores or other like business as part of the on-demand lifestyle.
The younger drivers find that using pay as you go insurance payment option helps to reduce the cost of being insured. This is accomplished since they only have the hire and reward policy active when they are making a delivery and getting paid.
How does pay as you go work?
To be able to use the pay as you go option, a person would have to have a telemetric device mounted to their vehicle. The receiver of the information sent out by this device will be the insurance company where the policy is taken out. The information being sent will include the vehicle’s location, the time the device was activated and the speed of the vehicle. To activate the device an app is used which is supplied by the insurance company.
How does the courier use the pay as you go system?
• First, the courier receives the message that an order has been placed.
• They go to the location of the pick up the order.
• With the app from the insurance agent they active the telemetric device and make the delivery.
• Once the delivery has been made they use the app to indicate this and the hire for reward policy is then deactivated.
Since the insurance company knows when and where the delivery has taken place, they charge the couriers with the cost of covering this delivery in terms of time or mileage.
How is pay as you go policies funded?
To take out a pay as you go hire and reward policy, a deposit is made. Most insurance firms also require the payments to be made by direct deposit. This way once the balance drops close to zero, another deposit is automatically withdrawn to cover the costs of the insurance.
The pay as you go hire and reward insurance is a low cost way for young drivers protected with the proper insurance and have an income by making deliveries with their vehicle. Hire and reward cover coverage is required by UK law to make deliveries and get paid for it.