Do you know anybody who doesn’t want to save money on car insurance? If you’re a safe driver who’s taken advantage of every available discount and are still looking to shave a few more dollars off your monthly premiums, usage based car insurance (UBI) may be a great option. Here’s what you need to know about UBI.
What is Usage Based Car Insurance?
Also called telematics, GPS car insurance, black box insurance and pay-as-you-drive insurance, UBI tracks your driving habits and behaviors and uses the data to calculate your premiums.
How Does a UBI Program Work?
Different car insurance companies have different programs, but they all basically function the same way. You voluntarily agree to let your insurer install a mobile-phone-sized device in your car. It monitors your driving and sends the data to your insurance company, which analyses the data to determine whether or not to adjust your premiums up or down. You get to see the analysis so you can improve your bad habits. The data can also come in handy for facilitating a claim or to prevent fraud.
What Does UBI Monitor?
Here again it will vary depending on the type of program you have, but UBI systems typically monitor things like the number of miles you drive, when you do your driving, and behaviors like speeding, hard braking, sharp cornering and jack-rabbit starts. They weigh that against statistical data to determine how big a risk you pose. Note that UBI devices have no way of distinguishing who is driving your vehicle, so you might want to remember that before you lend your ride to your teenage kid.
Who Sees the Data?
Unless a court order requires it, your data is never shared with government agencies or the police. Only you and the people directly involved with your policy ever see the data, unless you expressly allow it.
Can You Turn the UBI Monitor off?
No. The device is sealed and tampering with it will probably void your policy.
Who Should Consider UBI?
It’s ideal for people with reasonably good driving records and not so good for aggressive drivers or anyone who is already paying high premiums for a poor driving record.
Find pay-as-you-drive and other usage based car insurance programs and compare car insurance quotes online here.