UBI - Usage Based Insurance, Does it Make Sense
You may have heard of or usage-based insurance (UBI), telematics, or pay-per-mile. While slightly different, all use technology to monitor how, where, and/or how much a person drives a car to measure their risk and set the price for their insurance policy. This insurance product uses smartphones or devices that plug into a vehicle to record a person’s driving habits. Most major insurance companies have their own products and programs, such as Snapshot from Progressive and Drivewise from Allstate. Several newer companies like Metromile and Root provide usage-based insurance policies exclusively.
Do These Programs Lower Your Rates?
Telematics programs can save money, but they are best for people who drive infrequently and who typically take smooth, safe routes. Drivers in California often see greater rate discounts from telematics due to the impact of annual mileage in the state, but simply having a usage-based/telematics policy will only save you about 3% on car insurance
