Usage Based Car Insurance
Usage based car insurance becomes more popular each year. Underwriting can now include real world driving results. While traditional underwriting remains the main source of information these programs continue to grow nationally. Day to day driving tracked by an insurer yield discounts for the policy holder. Discounts can go as high as 30%. Each insurance company files their program details with a state authority. Consequently all usage based car insurance programs can be different.
Usage based car insurance starts with a trial period. While traditional methods offer snapshots only, trial periods vary from 90 days to 6 months. Trial periods usually include up front discounts as an incentive to participate. Discounts are removed if participation ends during the trial period. The trial period occurs one time. A device, owned by your insurance company, can inserted into a port in your vehicle. Installation instructions come with the device. The device tracks driving behavior during this period. Factors for determining driving behavior can vary by insurer. Therefore you should know how the program works.
Examples of data gathered include vehicle speed, time of day, types of roads driven, sudden acceleration and hard braking to name a few. Because criteria can vary be sure to match your driving habits with the right insurance company. For example, if time of day impacts results, working at night may be problematic. Online portals often come with the program. A driver can track results and modify behavior when needed. Some devices alert the driver of hazardous activities by making a noise. Drivers with these devices can adjust behavior while driving.
When the trial period expires the policy holder sends the device back to the insurer. The insurance company then analyses the data and applies the premium factors that have been filed with the insurance department.
Most of all keep in mind that usage based car insurance remain optional. Evaluate your own circumstances against a program to see if it makes sense for you. The program can be used for all vehicles or you can designate which vehicles are in the program. Some companies only apply discounts for good driving behavior. Some apply a surcharge for poor driving habits. Understand the details of a program before making your decision.
In conclusion, usage based car insurance will continue to gain momentum. Insurers are looking for ways to use technology to better predict losses and give consumers options that are more personal.