Auto Insurance 101: 3 Ways Usage-Based Insurance Could Benefit You
Auto insurance is a necessary expense. Unfortunately, not everyone qualifies for affordable insurance rates. However, new technologies are making it easier than ever to save. One newer type of auto insurance that could save you money is usage-based insurance.
With this type of insurance, a device is installed in your vehicle, and it is used to track to your driving. Your driving data is then sent to the insurance company. Once your insurance provider has the data needed, your rate is calculated. While this might sound really fancy or complicated, it's actually pretty simple. Even better, it could save you a lot of cash.
So what are the benefits of usage-based auto insurance? Here are three:
1. Discounts For Good Driving
As you might expect, good driving habits could score you significant discounts. This is very helpful, especially for those without much of a driving history. Instead of needing years of good driving records, a device that tracks your driving can prove you're a safe driver in a matter of months. This is handy, as it allows newer drivers the ability to score discounts and save money on their auto insurance.
In addition, these devices can help those that no longer drive unsafely. Since your data is sent to the insurance company frequently, your rate will be based on current driving habits. This allows those that previously had a risky driving record get better insurance rates. However, good driving habits will need to continue. Otherwise, the rates could go back up.
2. Improved Driving Habits
There are a lot of drivers that simply do not realize they are driving unsafely. If this is the case, the tracking device can help you realize how good—or bad—your driving habits are. Since your driving habits are continually tracked, you'll be able to notice specific trends. For example, perhaps you speed on your way to work. If this is the case, you can use the information collected from the device to alter your driving habits. This not only makes you a safer driver, but it can also save you money.
3. Easier Accident Investigations
Finally, these devices can make investigating accidents much easier. Since all of your driving data is stored, police and insurance companies have easy access to what actually happened. This data can be used to prove that you did not cause the accident. It can also show that you were driving safely when the accident occurred. This is very helpful, as it can mean that your rates will not go up due to the accident.
As you can see, usage-based insurance has many benefits. While the tracking device might seem odd, it actually has many benefits. If you would like to learn more about usage-based insurance, contact your insurance provider.