Usage-based insurance (UBI) is an increasingly popular form of auto insurance that uses behavioral measurements of your driving habits and vehicle use to determine your premium. In effect, UBI calculates your insurance premiums based on your driving miles and riskiness. If you want to learn more about UBI programs, contact the August Vincent Insurance Agency team serving the Crystal Lake, IL, area.
How UBI Works
Traditionally, insurers determine auto insurance premiums based on a driver’s accident history, gender, age, marital status, and other characteristics. While this system was the best available, it wasn’t perfect as it based premiums on your characteristics rather than your driving behavior. However, today, in-vehicle telematics, smartphones, and other technologies allow insurers to track how often you speed, hard brake, use your phone, drive miles, and where you drive to determine your insurance premiums. Some UBI policies are based only on your miles driven, while others use your mileage and driving riskiness.
Policyholders choose to participate in UBI; the insurer does not force you into the program. Financially, UBI benefits those who drive safely for limited miles (less than 11,500 per year) and don’t mind the insurer tracking their driving and location. Such drivers typically save 5 to 10% for signing up and 10 to 15% after a trial period that confirms they are safe drivers.
UBI has drawbacks for those who drive aggressively, drive a lot, or have privacy and data integrity concerns. Insurance companies use different technologies for their UBI programs, so switching insurers may also require switching technologies.
Working With The August Vincent Insurance Agency
Our August Vincent Insurance Agency team serves the Crystal Lake, IL, area and will answer your UBI or other insurance questions. Stop by or call (847) 512-7301 today to develop an insurance plan that meets your needs.
