Auto insurance is often based on factors such as your driving record and vehicle type. These give a good idea to the company of whether you are a risk to them. Fortunately, some insurance companies provide you an incentive to perform better on the road every time you get behind the wheel, and in return, you’ll get insurance discounts.
These incentivized programs are known as usage-based insurance policies. Nationwide SmartRide insurance is just one example of a usage-based insurance policy that is popular today. Nationwide and other companies will install a device in the car or an app on your phone to record your driving behavior.
Things like speeding, braking, the time of day you drive, and how many miles you drive are all factors that can present discounts on your auto insurance with usage-based plans. We’ll try to cover all the best policies so you can decide if they are right for you.
Telematics Devices for Your Vehicle
Telematics devices are a great way to receive possible discounts on your insurance. Many companies will track your data by installing one of these devices in your vehicle. The telematics device will track your speed, braking, and other things like distance traveled each time you drive.
Nationwide SmartRide insurance is one of the programs that use telematics devices the most in their usage-based insurance. Compared to other programs that may be used on your cellphone, using these devices usually offers a more accurate tracking of your driving.
Many people are most concerned about how much money they’ll save using this device. The average savings with usage-based devices is about 15%. For cautious drivers, adding one of these devices is highly beneficial.
If you speed a lot, you may be motivated to stop if you have a telematics device in your car. You’ll also be helping to save people’s lives by not speeding. Unfortunately, in the U.S., roughly 30 drivers died per day from speeding in 2020.
Telematics devices will help you know you’re becoming a better driver and allow you to save money along the way. If you’re interested in using one of these devices, speak to your agent. They may offer you options. However, some companies may prefer focusing on app-based policies through your phone.
Usage-Based Cellphone Apps
Progressive’s usage-based program, Snapshot, encourages you to install their tracking app on your phone. However, many people may not want a tracking device on their phones. Privacy is important to many people, and there may be a level of distrust about what companies are doing with your data.
Progressive is a very reliable and trusted company in the insurance sphere, so there’s no reason to worry they are using your driving data for anything more than calculating insurance costs. You can drive to go on a fun outdoor activity or go to your job each day without any worry.
These apps might not benefit people who travel thousands of miles a year. If you drive rarely, you are more likely to get discounts because you are on the road less frequently.
More companies are trying to innovate and create even better usage-based policies. Metromile’s programs are specially catered to people who want to save every last cent they can for driving less. Pay-per-mile has become one of their most popular policies.
Usage-Based Insurance for Businesses
Usage-based insurance is an excellent choice for businesses that have to insure a fleet of vehicles. If they have a trusted team of drivers who make good decisions on the road, there are many savings with usage-based insurance.
Usage-based insurance for fleets will also let you know which drivers perhaps aren’t driving as safely as others. The information you gain from this tool can help teach drivers how they can improve and keep others safe when they are on the road.
Understanding Usage-Based Insurance Policies
With this information, you can see the pros and cons of usage-based insurance and decide on what’s best for you, your family, or your company. Insurance companies will likely create even more policies in the usage-based space in the years to come.
