For safe drivers, overpaying for car insurance can be very frustrating. If you want a car insurance policy that rewards good driving habits, you should consider usage-based insurance. Usage-based insurance, or UBI, is a car insurance program that tracks your driving behaviors and offers benefits for safe driving.
Today, many auto insurance companies offer usage-based insurance as an alternative to traditional car insurance policies. Drivers appreciate lower insurance rates for excellent driving scores and discounts for participating in the UBI program.
Keep reading to learn more about usage-based insurance and how you can get started with a UBI car insurance policy today.
What is usage-based car insurance?
Usage-based car insurance policies collect your driving habit data and calculate a driving score. Policyholders with better driving scores can receive better rates on their car insurance policy. UBIs encourage safer driving practices while also helping you save money on your car insurance by rewarding you for driving less or having good driving behaviors instead of paying a standard rate.
Some insurance companies offer a discount on auto policies for simply signing up for a usage-based insurance program. On average, you can save 5% – 10% for signing up because UBIs encourage drivers to drive more safely. After a predetermined period, your insurer will evaluate your driving behavior and calculate a discounted auto insurance price based on that data.
How does usage-based insurance work?
Usage-based insurance policies utilize telematics devices to collect your driving data. The device connects to your smartphone via an app, so you can monitor your driving habits while insurance companies collect your data. In some cases, you may not need a telematics device. Several auto insurance companies are adopting UBIs with app-based trackers only. Your insurance company analyzes the data collected by the telematics device or app and calculates a driving score.
Several factors contribute to your driving score and auto insurance rate with UBI programs, including the following.
- Driving speed
- Hard braking or cornering
- How often you drive or miles driven
- Using your phone while driving
- Time of day
Benefits of Usage-Based Insurance
Usage-based insurance programs can save you money on your car insurance policy. On average, drivers save about 10% to 15% each year by enrolling in a UBI program. Even greater discounts are possible depending on how often you drive and how safely you drive. Generally, data collected from a usage-based insurance program helps safe drivers save money, not increase rates.
Who should get usage-based insurance?
For cautious drivers or people who do not drive often, usage-based insurance can be an excellent car insurance option. The average driver in America logs about 11,500 miles each year. You could benefit significantly from a UBI if you drive less than this.
Gentle drivers can also benefit from a usage-based insurance program—most UBIs track hard braking, acceleration, and hard cornering. You can get an excellent driving score and a considerable discount if you do not typically engage in these driving behaviors.
Who offers usage-based insurance?
If you are interested in affordable car insurance that fits your lifestyle, usage-based insurance is your answer. Bolt Agency is proud to offer a variety of car insurance policies and programs, including usage-based insurance. Start your quote today!