How Your Driving Habits Impact Your Auto Insurance Rates
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?
While the promise of lowering monthly auto insurance premiums is very appealing, it is important to read the fine print before agreeing to collect electronic driving data for the insurance provider. Companies may increase premium rates based on the results of collected data. People with poor driving habits can end up with much higher premiums, and aggressive drivers are at risk for even higher premiums. Aggressive drivers are defined as those who have had a citation indicating a serious disregard for all others on the road. Historically poor driving habits such as tailgating, hit-and-run, negligence, failing to yield or stop or other forms of reckless driving will result in escalated auto insurance premiums. Poor parking habits that incur citations also factor into premium calculations.
Other ways to save
Many insurance companies offer safe driving discounts for drivers who have excellent driving records and are accident free for a certain length of time. Others offer diminishing deductibles over time for drivers with clean, accident-free driving records. If you own more than one vehicle, a multi-car discount may be applied. Consumers should always research for additional charges that may be incurred for participation in such programs prior to purchasing an auto insurance policy.
Finding the right coverage and best deals doesn’t have to be complicated. Nsure gets you the coverage you need and the best auto insurance deals. Contact us today to compare auto insurance rates and determine the perfect fit for your budget.