Does Usage Based Car Insurance Offer a Route to Lower Rates?

Usage-Based Car Insurance

For most American drivers, car insurance is not only legally mandated but is a real necessity. However, it’s now becoming possible to sign up for as pay-as-you-drive, or usage based car insurance. If you don’t drive very much, it can give you lower rates. However, there are certain things to know before you decide that this is the best option for you.

Wireless Transmission Devices will Monitor Car Usage

Usage Based Car InsuranceAs with traditional insurance programs, your driving habits will still play a large role in your rates. Unfortunately, if you had a habit of occasionally driving recklessly in the past, usage-based insurance programs won’t let you use the honor system to prove that you’ve changed your ways for good.

Usually, the amount of miles that you drive in a particular period is automatically calculated and transmitted to your insurance company through a device that resides in your car. However, Allstate and Progressive are just two companies that also monitor driving behavior such as the amount of times that a policyholder drives at speeds over 80 miles per hour, or the way that they use their brakes. A member of Progressive’s usage-based insurance program notes that unusual braking patterns can point the finger at aggressive drivers.

Understandably, some drivers are concerned that their privacy would be violated through these monitoring systems. Although more detailed monitoring does often result in lower rates for people who make a habit of driving safely, there are less invasive ways to get enrolled in a usage-based car insurance plan, too. Some programs only require odometer readings performed by a trained specialist, so that the company can get an accurate picture of just how much a person drives in any given month.

Usage Based Insurance Plans Reduce Environmental Impact

Data from the Environmental Defense Fund also says, “usage-based insurance plans are kinder to the environment”. They explain that if people adapt to a system that sees them paying for the exact amount that they use their vehicle, they might be more encouraged to cut down on their unnecessary trips.

Additionally, a report from Brookings Institute said that if every driver in America purchased usage based insurance per mile rather than the conventional type, there would be an overall savings of up to 60 billion each year in costs relating to accidents or other automobile damage. They also say that driving would fall by eight percent around the nation. This decrease could cut down on pollution from tailpipe emissions, too.

Why isn’t Usage-Based Car Insurance Available Everywhere?

Since Usage-Based Car Insurance, offers drivers the chance to get a lower premium, you might be curious about why it’s not yet available everywhere. In most cases, it’s because certain states have insurance requirements that don’t allow usage-based insurance.

Fortunately though, over 30 states including New Jersey, Maryland and Oregon have some form of usage-based insurance available. Others, such as California, worked with the respective insurance commissioner to get outdated regulations altered so that usage-based insurance is now available there.

If you’re hunting for ways to save on car insurance, usage-based plans may be your answer. Check today and see if it’s currently available where you live, or might be in the near future.

See Also:

Common Myths About Car Insurance

Top 10- Nicest Affordable Cars

5 Ways to Save on Car Insurance You Might Not Know About

7 Fuel Efficient Cars Under $20,000

Do You Need Separate Insurance Policies for Your Vehicles?

The Ins and Outs of Car Insurance

Do You Know That You Can Lower Your Car Insurance Costs?

Look Out Ahead: How to Avoid Common Road Hazards

From Amazon:

Usage Based Car Insurance

Insurance for Dummies

 

Deanna Ford writes for several insurance blogs. Find cheap Michigan Car insurance quotes and compare New Jersey auto insurance rates online.

Today’s Headlines

5 Ways You Can Build Your Professional Skillset with Certifications

In a competitive job market, making your resume stand out from the crowd could be as simple as earning a certificate or two by passing a few exams. This can … [Read More...]

Tips for Coping with Unemployment

Unemployment is tough, not only are there financial repercussions, but there are psychological ones as well. Getting laid-off no matter whether it is due to … [Read More...]

Only 25% Intend to Retire at Retirement Age

Every two years Gallup does a survey and asks working age adults if they intend to retire once they reach "full retirement age". This is the age set by the … [Read More...]

Over a Million New Jobs Not 211,000 

According to the BLS Commissioner's report for this month: "The unemployment rate changed little over the month but, at 4.4 percent, matched the pre-recession … [Read More...]

Unemployment News

BLS Monthly Employment Report for April

The US economy added 160,000 "seasonally adjusted" jobs in April, the lowest figure in the last seven months. The adjusted U-3 unemployment rate remained steady at 5%. The Unadjusted U-3 fell to 4.7% while the … [Read More...]

More Posts from this Category

Comments

  1. Thanks for the concepts you have shared here. On top of that,
    I believe usually there are some factors which will keep your
    automobile insurance premium down. One is, to take
    into consideration buying vehicles that are from the good listing of car insurance companies.
    Cars that are expensive are usually more at risk of being stolen. Aside from that insurance policies
    are also based on the value of your car, so the higher priced it is, then higher the particular premium you only pay.

    I have observed that car insurance companies know the vehicles which are liable to accidents
    along with other risks. Additionally, these people know what types of cars are given to higher risk and also
    the higher risk they’ve got the higher the particular premium rate.
    Understanding the uncomplicated basics with car insurance will help you choose the right types of insurance policy that may take care of your wants in case
    you become involved in an accident. Thanks for sharing a ideas for your blog.

    Thanks for your post. I would like to write
    my opinion that the price of car insurance varies greatly
    from one insurance policy to another, mainly because there are so many
    different facets which bring about the overall cost.
    For instance, the brand name of the car or truck will have a massive bearing
    on the cost. A reliable ancient family auto will have a more affordable premium
    than just a flashy fancy car.
    Thanks for the diverse tips discussed on this
    blog site. I have realized that many insurance carriers offer consumers generous special
    discounts if they prefer to insure more and more cars together.

    A significant amount of households have several vehicles these
    days, especially those with more mature teenage kids still located at home, as well
    as the savings upon policies could soon increase. So it pays off to look for a great deal.

    One thing I would really like to say is always that car insurance canceling is
    a terrifying experience and if you are doing the right things as a driver you simply will not get one.
    A number of people do get the notice that they are officially dropped by their own insurance company and many have
    to fight to get more insurance after the cancellation. Affordable auto
    insurance rates usually are hard to get after having a cancellation. Understanding the main reasons regarding auto insurance cancellation can help drivers prevent burning off one of the most
    significant privileges readily available. Thanks for the concepts shared by
    means of your blog.

Speak Your Mind

*