Drivers around the country may be eligible to save on their auto insurance by utilizing safe-driving tools that monitor their driving habits. This concept is known as usage-based insurance (UBI), as drivers use various tools to monitor their driving. Learn more about UBI programs and whether they may be right for you below.
What Is UBI?
Many national insurers offer UBI programs to acquire driving data, such as speeding, hard stops, mileage and phone use while driving. This understanding of driving habits can come from devices installed in a vehicle, smartphone apps or systems built into vehicles that transmit driving and other information. Insurers use this data to offer savings to participating policyholders.
Do All Insurers Offer UBI Programs?
A few well-known insurers that are offering UBI programs to their policyholders include the following:
Allstate drivers can activate Drivewise in the Allstate® mobile app and get cash back for safe driving.
Progressive drivers can use its Snapshot program to help control what they pay for their car insurance. If drivers drive less, in safer ways and during safer times of day, they can maximize their results.
Travelers Insurance offers IntelliDrive, a smartphone app, to monitor driving performance. Enrollees may be able to save on their car insurance.
The UBI options that may be available to you will likely vary, so be sure to check with your insurer to see whether you’re eligible to participate in this type of program.
How Does It Work?
UBI uses driving habits and how much vehicles are driven instead of traditional factors to determine insurance premiums. In many states, insurers are permitted to offer automatic discounts and personalized renewal rates to drivers who participate based on their results.
Usage-based insurance is also known as diminishing deductible auto insurance, which rewards safe drivers with reduced deductibles. In addition, the car insurance industry refers to UBI as telematics insurance since it utilizes telematics devices to obtain driving data. Over time, drivers who maintain clean driving records decrease their deductibles by a certain amount.
Is It Right for Me?
Usage-based insurance may be worth it if you are a safe driver. However, you want to review your insurer’s UBI program carefully. In some states, insurers may raise premiums if drivers don’t score well during the review phase of their UBI program. Sometimes, driving habits, such as speeding and phone use, could result in higher premiums.
To learn more about what UBI programs may be available to you, and whether they may be suitable for your situation, give us a call today. The team at ISG Insurance can help you learn more about UBI and its benefits