Usage based insurance (UBI) has gained increasing traction for it’s ability to offer consumers customized rates on their car insurance policies based on information collected from a telecommunications device (telematics). There are several variations of UBI currently being offered including pay-how-you-drive, pay-as-you-go and distance based insurance. Consumers are increasingly being drawn to this technology as a way to lower policy rates. It is important to analyze your current situation along with advantages and disadvantages of this technology before you opt in.
The main thing consumers are interested in when considering pay-as-you-go insurance is saving money. The idea behind these policies is to make auto insurance more affordable for drivers. When insurance providers are able to link driver behaviors to premiums, policies tend to be more accurately priced. These type of programs can also be beneficial for low-income drivers or drivers who have been in an accident and cannot afford other policies.
Added control of premiums
These types of policies allow the consumer to control much more than average car insurance policies. These policies allow the driver to set the amount of miles they want, add miles if necessary, and drive during off peak hours to help minimize miles used.
Savings for alternative transportation
Most pay-as-you-go policies have specified mileage agreements and most consumers of this technology know they can save money by driving less. This incentivizes drivers to walk, ride a bike or use public transportation.
These financial incentives to driving less improve the environment and contribute to less potential for accidents on the road.
In order for insurers to accurately price your policy, they must gather a host of information about where and how much you are driving. Providers do this by installing a device in your car to collect data. If you are interested in a pay-as-you-go policy, you will have to accept that your insurance company will be tracking habits and locations.
When a consumer signs up for a pay-as-you-go policy, they choose an allotted amount of miles per given time period. However, if a driver exceeds the agreed upon mileage cap, costs can add up quickly. These overage costs can end up making a pay-as-you-go policy more expensive than those which are not usage based. Drivers interested in these policies should have an accurate estimate of how much they plan to drive.
Although these programs can be beneficial to drivers, they sometimes entail significantly more effort than traditional policies. Most of these programs require you to self monitor your miles so you don’t go over. Some of these policies even require drivers to check in at physical tracking stations to have their mileage checked.
No matter what policy you decide is right for you, it is beneficial for insurers to offer the consumer options. For more information on different policies or for car insurance quotes in Las Vegas, call Accupro Insurance Service at (702) 251-4949 today.