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The Drive for Better Rates

The Drive for Better Rates: Usage-Based Auto Insurance is Good for Drivers

Usage-Based Insurance
Safe drivers earn fairer, lower auto rates

It pays to be a good driver. Usage-based insurance uses real-time data from your smartphone to assess risk — rewarding safe drivers with more accurate, fairer, and lower auto rates.

1 How Usage-Based Insurance Works

It pays to be a good driver. Usage-based insurance (UBI) companies are seeking to change the way auto drivers are insured in an effort to lower prices for good drivers. Usage-based auto insurance utilizes real-time information, gathered on the driver’s smartphone, to assess risk. Tech-driven companies like Root (link: Root Insurance) ask customers to download the Root app (Root Insurance app on the App Store) which allows the company to monitor a consumer’s driving habits for 2-3 weeks entirely on their smartphone. By having the opportunity to study sensor data, which can include everything from frequent driving destinations to how often a driver changes lanes, insurance companies like Root can set more accurate and fair auto insurance prices, thereby rewarding better drivers with lower rates.

2 The $100 Billion Overpayment Problem

The statistics on insurance are jarring, to say the least. A recent study by analytics company ValChoice determined that consumers overpaid for auto insurance to the tune of $100 billion over the last five years (link: http://www.fa-mag.com/news/americans-overpay-more-than–100-billion-for-car-insurance-30132.html). In addition to Undoubtedly, this has sent consumers on a mission to secure more efficient and fair pricing, especially when they consider themselves good, safe drivers. The receive an individualized insurance policy, consumers must accept the trade-off: their privacy. With every aspect of their driving under watch, consumers must agree to constant monitoring during the assessment period, with their driving skills evaluated by an algorithm.

3 Why Drivers Are Making the Switch

Still, despite the trade-off, consumers are flocking to more personalized, fairer insurance rates. And who could blame them? Prior to usage-based insurance companies, insurers used demographics such as age, marital status and gender, to determine pricing. Often, good, safe drivers would get stuck with higher rates because of the risk assessment of their entire demographic, rather than their personal driving habits. Now, with very specific driving data available from something as simple as a smartphone, consumers, and the insurance industry overall, can substantially benefit from lower, fairer rates. At a time when consumers are victimized by inflated prices, unethical billing practices and minimal personal attention in almost every industry, this is a very welcome trend.

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Frequently Asked Questions

What is usage-based auto insurance?

Usage-based insurance (UBI) is a model that uses real-time information gathered on a driver's smartphone to assess risk. Instead of relying on broad demographics, UBI companies study actual driving data to set more accurate and fair auto insurance prices, rewarding better drivers with lower rates.

How does a company like Root track my driving?

Tech-driven companies like Root ask customers to download the Root app, which lets the company monitor a consumer's driving habits for 2-3 weeks entirely on their smartphone. The app studies sensor data, which can include everything from frequent driving destinations to how often a driver changes lanes.

How much do consumers overpay for car insurance?

A study by analytics company ValChoice determined that consumers overpaid for auto insurance to the tune of $100 billion over the last five years. This has sent consumers on a mission to secure more efficient and fair pricing, especially when they consider themselves good, safe drivers.

What is the trade-off with usage-based insurance?

To receive an individualized insurance policy, consumers must accept a trade-off: their privacy. With every aspect of their driving under watch, consumers must agree to constant monitoring during the assessment period, with their driving skills evaluated by an algorithm.

Why is usage-based insurance better for safe drivers?

Before UBI, insurers used demographics such as age, marital status and gender to set pricing, so good drivers often got stuck with higher rates based on their entire demographic rather than their personal habits. With specific driving data from a smartphone, safe drivers can benefit from lower, fairer rates.

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Usage-based auto insurance rewards safe drivers with lower, fairer rates by tracking real driving data on your smartphone.

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The Drive for Better Rates: Usage-Based Auto Insurance is Good for Drivers.

It pays to be a good driver.

The statistics on insurance are jarring, to say the least.

Still, despite the trade-off, consumers are flocking to more personalized, fairer insurance rates.

Usage-based insurance (UBI) is a model that uses real-time information gathered on a driver's smartphone to assess risk.

Tech-driven companies like Root ask customers to download the Root app, which lets the company monitor a consumer's driving habits for 2-3 weeks entirely on their smartphone.

A study by analytics company ValChoice determined that consumers overpaid for auto insurance to the tune of $100 billion over the last five years.

To receive an individualized insurance policy, consumers must accept a trade-off: their privacy.

Before UBI, insurers used demographics such as age, marital status and gender to set pricing, so good drivers often got stuck with higher rates based on their entire demographic rather than their personal habits.

Billshark negotiates your bills for you — no savings, no fee.

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1 How Usage-Based Insurance Works.

2 The $100 Billion Overpayment Problem.

3 Why Drivers Are Making the Switch.

Frequently Asked Questions.

What is usage-based auto insurance?.

How does a company like Root track my driving?.

How much do consumers overpay for car insurance?.

What is the trade-off with usage-based insurance?.

Why is usage-based insurance better for safe drivers?.

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Root Insurance app on the App Store.

http://www.fa-mag.com/news/americans-overpay-more-than–100-billion-for-car-insurance-30132.html.

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