Could Tracking Your Driving Lower Your Insurance Costs?
When it comes to auto insurance rates, for a long time, companies mainly used demographic information to judge how much of a risk you were as a driver. If you were a member of a group that got into a lot of accidents – say, someone in their early 20s with a sporty car – you would be considered a high risk and have to pay higher rates.
If you're a safe driver and looking to lower your insurance rates, it's worth looking into a new alternative: usage-based insurance, or UBI. By tracking how, where, and how much you drive, insurance companies can consider you as an individual rather than as simply a member of a larger group. If you think usage-based insurance might be able to save you money, be sure to consider the following:
What Are You Willing To Have Tracked?
Different UBI plans will track different things. The most basic type of UBI is based simply on mileage readings: if you drive less, you are less likely to get in an accident, so your rates will be lower. This could be a good choice if you don't spend much time in your car; however, if you are a safe driver, you could be missing out on even better rates if you're not having your driving patterns tracked.
More complicated UBI involves tracking your car's position with GPS data. This allows companies to monitor where and when you are driving. Rush hour traffic in a big city is more dangerous than a longer commute on empty rural streets, so this can give a more accurate risk assessment than simply looking at your vehicle's mileage – but you'll benefit the most if you can avoid driving in heavy traffic or on dangerous roads.
The most personalized form of UBI tracks not only your vehicle's position but also how you drive. How fast you drive, how hard you brake, and how often you swerve can all be measured, building up a profile of how recklessly or safely you drive.
Are You Really A Safe Driver?
Most people think that they are safe drivers. But when your insurance company tracks your driving habits, they care about more than whether you get into accidents. Things like speeding or hard braking are risky habits, so if you believe you can "safely" drive over the speed limit or weave in and out of traffic, you're not the type of driver who would be rewarded by UBI.
Are You Willing To Change How You Drive?
One of the biggest societal benefits to UBI is that it motivates drivers to drive more safely and to drive less. Once you have UBI, a host of options opens up to you for low cost auto insurance rates if you're willing to change how you drive. Start driving more gradually. Take public transportation when it's available. Leave a bigger space cushion and brake and accelerate more gently. As you become less of an insurance risk, your rates will decrease to reflect that.