New cars come equipped with GPS and onboard diagnostics systems. Usage-based insurance leverages those and other automotive technology to customize insurance based on individual driving habits.
Car owners are using usage-based insurance more frequently. Because it often leads to lower auto insurance premiums, it`s a trend that`s likely to continue.
Want to give usage-based insurance a try? We’ll explain what it is, how it works, and which usage-based programs, like Nationwide`s SmartRide for newer vehicles, match your needs.
What is usage-based insurance (UBI)?
Usage-based insurance (UBI) is sometimes referred to as telematics car insurance. UBI is a type of automobile insurance that uses technology to monitor driving habits and determine the proper insurance coverage and rate.
UBI relies on the science of telematics and the use of smart ride devices. We`ll address what is a “smart ride” device a little later, but it heavily depends on telematics.
Telematics combines telecommunications and data information to create innovative driving technologies like autonomous driving systems, onboard diagnostics, and GPS to record mileage and driver behaviors. It helps insurers better calculate the risk of insuring motorists.
Because UBI measures and records a motorist`s driving daily, the better you drive, the lower your rates will be. By electing UBI coverage, drivers can use smart-driving technology in their automobiles to lower their car insurance. In fact, UBI could be one of the biggest factors in saving money on your car insurance.
How does usage-based insurance work?
UBI works by using technologies that are either installed on your car or can be accessed through mobile applications on your phone. Every time you drive, these technologies monitor and capture various driving data like mileage, fuel levels, speed, braking, and engine diagnostics.
UBI lets insurance companies better predict driver risk. When insurers can more accurately calculate the risk of an accident, they can offer more accurate coverage and lower premium rates.
Ultimately, UBI can benefit drivers because the more responsibly a motorist drives, the lower the cost of auto insurance. If you use UBI as part of your auto insurance coverage, you need to engage in safe driving habits to reap the driving discount rewards.
What is Nationwide`s SmartRide?
Many insurance companies provide UBI, so how do you know which one is right for you? The key is finding a convenient UBI program that saves you the most money, like Nationwide insurance`s SmartRide.
SmartRide features an easy-to-use “smart ride” device that plugs directly into your car. Typically, you can install the SmartRide device yourself. You`ll likely have to download related software and set up an account. Once everything is installed, your driving behavior will be tracked every time you drive.
SmartRide is not only convenient, but it can also result in significant savings on the cost of your auto insurance. According to Nationwide, safe drivers save up to 40% on their car insurance using the SmartRide program.