You’ve seen it before, and maybe even used it. But now many insurance carriers are offering significant discounts to customers who allow the carriers to track driving habits for a period of time using a mobile app or attached device. In the Insurance World, this is known as telematics, or UBI (Usage-Based Insurance.) Many carrier programs offer you the option to “save money” with their Usage-Based Insurance Discount programs.
Let’s learn more…
Is a Usage-Based Insurance Discount right for me?
When insurance companies assign you a rate, it is based off of a number of standard variables: age, gender, driving record, vehicle type, etc. Carriers do a magical calculation to figure out the “average” risk based upon these variables, and assign you a rate based on that calculated risk. The riskier the driver, the higher the rate (and vice versa!)
But UBI allows you the opportunity to differentiate yourself from the Average Joe (or Jane.) Based on your good driving habits, you can get a multitude of benefits, including:
- Empowerment to earn a lower rate – the safer you drive, the more you save;
- Enrollment discounts;
- Coaching & feedback on your driving habits – helping you to become a better driver;
- Ability to opt out after a period of time;
- Potential savings at renewal for “safe” drivers, based on data gathered.
- Teen Parents – use this as a tool to ensure your teen is using safe driving habits! You can even monitor your teen’s driving with some programs!
How Does A Usage-Based Insurance Discount Program Work?
Basically, the carriers offer a device to install in/on your vehicle, or require the use of a mobile app. Most of these track driving behavior for 90 days or less, in real time, and begin to “score” you based on data findings. Here are some examples of the type of data programs may gather. Note: not all of these behaviors are tracked for every program, some only track three or four of them.
- Time of Day
- Hard Braking
- Rapid Acceleration
- Number of miles driven and/or amount of time driven
- Type of miles (highway vs. city)
- Trip regularity
- Distracted Driving (using your hand-held device while driving)
Does My Insurance Carrier Offer A Usage-Based Insurance Discount?
Currently, we work with a handful of carriers that provide Usage-Based Insurance discounts. As of the time of publication, these are:
- Nationwide (Allied) SmartMiles and/or SmartRide Program: When you sign up for one of these programs, you will either be tracked by your vehicle usage (SmartMiles) or your driving behavior (SmartRide.)
- With SmartMiles, the less you drive, the more you save. This is a good choice for many, but especially for those who drive about 8,000 miles per year or less, such as those who use public transit, carpool, work from home, have a youthful driver, or have more vehicles than drivers in the household.
- With SmartRide, measurements include: miles driven, nighttime driving, idle time, hard braking & acceleration. After they have enough data, you could earn up to a 40% safe-driving discount. You can check the app to see the progress and track the discount, which will be locked in at the end of the program & applied towards your renewal. **SmartRide may not be available to all customers at this time.
- Progressive Snapshot: One of the first in the industry, the Snapshot program personalizes your rate based on your actual driving. Using either a mobile app or a plug-in device, you’ll drive with Snapshot for a full policy period (either 6 or 12 months).
- Safeco & Liberty Mutual RightTrack: RightTrack rewards Safeco policyholders for their safe driving habits, by receiving an initial 10% discount upon enrollment that lasts through the review period. After just 90 days, you’d receive a final discount of 5-30% that will stay with you through the life of the policy. No matter how well you drive, you’ll be guaranteed to earn a discount just for participating! See how it works here: https://www.safeco.com/products/righttrack#Mobile-app
- State Auto Safety 360: By their mobile app – in tandem with a Tag – State Auto gathers information about your car and how you drive. You could see a discount up to 50% at the time of policy renewal. This “App + Tag” program determines a score based on a rolling 100 days of data, so as long as you are actively enrolled, you’ll receive the benefits. See more about it here: https://www.stateauto.com/safety360
- Traveler’s IntelliDrive Program: Drivers with high scores can save up to 20% at renewal time, and you can see your score in real-time on the mobile app. This app collects information about driving habits associated with braking, acceleration, speed and time of day for a period of 90 days, however customers can opt-out after 45 days. Once evaluated, you can save on premium based on “safe driving,” however riskier driving may result in a higher premium. Changes take effect at renewal.
What’s Next: How Do I get started?
Let us know if you’re interested in trying out the UBI program. Whether your current auto policy is with one of the providing carriers, with another agent or with a carrier who does not offer the Usage-Based Insurance Discount program, we can work with you to evaluate your options and help you determine what is best for you and the drivers in your household.
Other Ways To Reduce Your Costs
We have a few other tips on how to reduce your auto insurance premiums. Check them out below.