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Usage-Based Insurance

Usage-Based Insurance

Save Money on Auto Insurance Based on Your Driving Habits

Did you know you might be able to save money on your auto insurance policy based on meeting certain driving metrics? Usage-based insurance is something you should explore with your insurance agent if you are a very safe driver or if you don’t drive very much.

Usage-based insurance is a relatively new concept. It sometimes goes by the names:

  • UBI
  • Pay how you drive
  • Pay as you drive
  • Pay per mile
  • Pay as you go

The idea is that if you are either a careful driver or drive very few miles, your risk of getting in an accident decreases. Therefore, you shouldn’t have to pay as much for auto insurance.

With many people telecommuting or attending school remotely these days, this is a smart option for our clients in St. Louis, Missouri. And of course, if you are an excellent driver, we like to reward you for your good habits.

Usage-Based Insurance Collects Data for Auto Insurance Discounts

For you to qualify for usage-based insurance, your insurance company needs some basic data about your driving history and routines. If a discount is being applied for low mileage, you may be asked to install a device to record your odometer. Or you may be requested to photograph your odometer periodically and send the images to your agent or upload them to an insurance app on your mobile device.

Likewise, for safe driving, dashboard devices or GPS might record your driving speed, braking patterns, turning technique, routes driven, or time of day driving. This is known as telematics in the industry.

Typically, a baseline set of data is used to establish a rate for your insurance premium. As long as you don’t deviate from your safe driving habits or low mileage, you get a significant discount on the cost of your insurance.

UBI Offers Many Benefits to You and Others

There are multiple advantages beyond cost savings to you, the insurance industry, and other insured parties when you use usage-based insurance:

  • Motorists tend to be more mindful of their driving, knowing their insurance premiums are dependent on their performance.
  • Insurance companies can better segment risk within their customer base.
  • Drivers generally have more insurance options at their disposal.
  • Safe drivers, especially younger ones, aren’t paying for their peers’ bad driving, and vice versa, poor drivers bear the brunt of insurance costs in a shared pool scenario.
  • Parents can see how their teen drivers are doing behind the wheel and review safe driving tips if necessary.

If you think you might qualify for usage-based insurance, we’d be happy to talk more with you about your choices. Give us a call at Clayton Hanley Insurance 314-487-2921 or reach out online, and our independent agents will give you all the information you need.