Is UBI for you?

maxim hopman 16na5rDDRk unsplash

In recent years, some insurance companies have started to come out with car insurance products that allow you to be charged specifically based on how you drive. Pay-as-you-drive, User-based-Insurance (UBI), and customized car insurance is just a few of the terms used to describe this type of car insurance product.

Although each insurance company’s version of UBI differs slightly, all of the ones we offer are a slightly different version of the same general concept.  An app on your phone (some used to use an actual device plugged in to your car… but come on check what year it is! measures things such as acceleration, hard breaking and turning, time of day driving, and kilometers driven, for example.  Each may measure something slightly different, but the theory is that those who are often braking hard (i.e. not leaving enough room between themselves and others, or not looking ahead to see upcoming hazards, or aggressive driving), quick accelerating (speed as a factor and aggressive driving), and speeding are more likely to have an accident and should pay more for insurance.  Those that display “good driving habits” in these areas deserve a greater discount and should have cheaper car insurance.

We often times will hear from skeptical clients who say that there is no way they would let an insurance company track their driving.  HEY – to each their own – we have many options that don’t do this.  That being said, it is at least worth you considering if you would like this way of saving money.  Some people think to themselves (or actually say to us although it hurts our feelings), there is no way an evil insurance company is going to give me a discount on driving. Well, I can only speak from experience. I, myself am currently insured with a company using UBI.  Although my discount has ranged between higher and lower, I am currently at an 18% discount because of how I drive every day. Now… I am sure that I am an exceptional driver compared to average ;-> so I asked one of the insurance companies offering such a product what the avg. discount of all the UBI policies we have sold was.  It ranged significantly across different age bands between 16 and 99 with the highest discount being for those aged 20-29 years of age and receiving an avg. discount of 18.9%!  You can figure out for yourself, how much that means you would save per year or per month on your insurance premium.  The average across all the policies in our office was a 16.5% discount.

So, if you are concerned with big brother watching, we can certainly help you find an insurer that won’t ride shotgun with you… just be aware that you could be paying more to ride solo.