With the cost of living rising exponentially, everyone is exploring ways to reduce monthly expenses without losing necessities. Your driving habits play an important role in your auto insurance premiums and can potentially reduce their cost. Major car insurers now offer customers the opportunity to collect personal driving data, which is analyzed to determine auto insurance premium fees, possibly dropping current rates.
Usage Based Insurance
Usage Based Insurance (UBI) is when an auto insurance premium is guided by personal driving data. This data is collected in a variety of ways dependent on the type of vehicle you drive and which insurer you use. Some insurers offer a tag device to place on the windshield. Others offer an app for your smartphone or use information gathered from GPS and OnStar devices. Some utilize plug-in devices that tap into your car’s operating system.
Insurance companies gather information on the number of miles driven, time of day, sudden or hard braking, acceleration speed, hard turns and phone use while driving; all of which are driver-controlled habits. They also take into account existing guidelines for the type of vehicle and its safety features, costs of potential repairs, where you live, accident history, ticket record, age and gender. All of this info goes into determining a UBI-influenced premium. Some companies factor in your credit score as well. Approximately 48% of insured drivers see a reduction in auto insurance premium costs by participating in data collection of driving habits.
Is UBI right for me?
