Usage-Based Insurance - A New Approach to Insurance
Posted by drivebuddyAI on June 30th, 2022
If you are on the lookout for a type of vehicle insurance that takes into consideration your good driving skills, then usage-based insurance (UBI) might be a good fit for you. UBI is being offered by certain auto insurance companies as an option that tracks your driving behaviourand could end up resulting in cheaper vehicle insurance if your driving is assessed as safe.
Usage-based insurance is a model of vehicle insurance that bases the cost of a policy on how safe a driver’s habits are. The data required for usage-based insurance is collected by the driver’s vehicle and analysed by the insurer to determine the final rate of insurance. The better the driver, the lower the rate.
How Does Usage-Based Insurance Work?
UBI can be a boon for both vehicle insurance companies and drivers. Some drivers can profit from a lower premium with UBI than with traditional insurance, while insurance companies benefit by motivating the insured to drive more safely.
Usage-based insurance programs make use of the vehicle telematics data that can be collected from mobile networks, GPS and similar tracking technologies. They usually track the following driving behaviours:
The technology that tracks your vehicle’s telematics data depends on the insurance company. Driving data is generally collected in the following ways:
Certain insurance companies also offer you a choice of how you would like the data to be collected, depending on where you reside.
While the way your driving behaviouraffects your insurance premium is dependent on the insurer, a standard UBI plan tracks your habits with a vehicle tracking deviceover a period of time. Once the review period is up, you may be offered a discount on the basis of the telematics driver behaviourdata.
Potential Benefits of Usage-based Insurance
Key Features of Usage-Based Insurance (UBI)
Types of usage-based insurance
Usage-based insurance typically falls under two categories:
The other type singularly tracks how many miles you drive and can be called pay-as-you-drive, pay-as-you-go or pay-per-mile plans.
Is Usage-Based Insurance Right For You?
The highest discounts under usage-based insurance are given to safe drivers who cover less distance than the average motorist. This makes these plans the best option for students, retirees, stay-at-home parents, and drivers who rarely use their vehicles because they make use of public transportation.
In India, the insurance authorities are looking forward to the introduction of usage-based vehicle insurance in the country, hence it is likely that major insurance companies will start offering such policies in the future.
Usage-based insurance might be the one for you if:
If you believe you’re a safe driver or you work remotely, have a short commute or log less distance than the average driver, usage-based insurance could possibly bring down your auto insurance rates.
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Joined: June 30th, 2022
Articles Posted: 7
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