Understanding How Usage-based Auto Insurance Works

Understanding How Usage-based Auto Insurance Works

Getting the right auto insurance coverage in Astoria, NY, takes patience and detailed review to avoid overpaying. One way to cut insurance costs is to reduce your driving miles and find transportation alternatives. Here’s a look at how usage-based auto insurance is a good option for safe motorists who put minimal miles on the road.

The Basics of Usage-based Insurance

Usage-based insurance (UBI) is an emerging cost-cutting solution that reflects minimal usage based on telematics. This IoT-based technology involves installing a monitoring device in your vehicle that connects with the insurance company. The device delivers data that measures various driving behaviors such as speed, acceleration, and hard braking.

The data reveals to your insurer how many miles and the time of day you drive. It scores your driving behavior, which can lower your costs further if you demonstrate proper driver safety.

Some firms offering usage-based auto insurance in NY give you options on how your driving data is collected through either smartphone apps or devices. The insurer then tracks your driving activity over a certain period and reviews your ratings to consider possible discounts. However, the firm will also take traditional factors into account, such as your overall driving record, age, claims history, residence, and credit score.

Is Usage-based Insurance Worth It?

UBI is definitely worth pursuing if you are a safe driver and can prove it through stats. For example, Travelers IntelliDrive is a 90-day telematics program that rewards drivers with up to 20 percent discounts. However, be aware some insurers may raise your rate if your driving score is low. Speeding, for example, can lower your score.

This insurance option is ideal for people who walk, ride a bike, or use public transportation more than they drive a car. More and more people are driving less and less due to high gas prices and growing concern about the environment. When you choose to drive less, you are helping your community reduce traffic congestion as well as greenhouse gases.

So if you rarely drive a car, why should you pay as much insurance as people who drive every day? UBI is ideal if you drive a few days or less per week. It’s also an appropriate plan if most of your work is done at home and you already avoid traffic commutes.

Other Important Considerations

The main risk involved in UBI is if you don’t live up to safe driving behavior, the whole plan can backfire. Ask yourself if you’re willing to be monitored for such driving behavior, knowing it can impact your rates positively or negatively. Large insurance companies typically offer UBI in certain states. You should first find out about a specific program and the driving behavior it measures, so you know what to expect.

One of the nuances of UBI is that if you become a passenger instead of a driver of your car, you will have to notify the program through an app to keep the data reflective of your driving. Understand that each program has its own rules for opting out as in some cases you’ll lose the discount with it.

One way to get the lowest auto insurance rate possible is through UBI. As long as you’re a safe driver who doesn’t drive much, it can lead to consistent savings over time. Contact us at 01 Insurance today. We’re ready to provide you with the best auto insurance in NY based on your usage and coverage needs.