YOU ASK:
What is the definition of Pay-At-The-Pump?
WE ANSWER:
Pay-At-The-Pump refers to a system where the premiums for an auto insurance policy is paid based on a gasoline surcharge. This surcharge is added to the price per gallon of the gasoline. This system was used in the 1990s. Simply put, policy holders pay for their premiums every time they buy gasoline for their cars.
Pay-at-The-Pump Insurance is an alternative to just paying lump sum premiums for auto insurance. Proponents of this kind of insurance point out the advantages of this system - it's more efficient, it lowers the cost of insurance and also enhances equity. The system also encourages prudent use of gasoline and thus benefits the environment.
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