Usage-based insurance (UBI) is a form of insurance that determines your premium rates based on your driving behavior. Here, your insurance company installs a telematics device in your car to assess your driving habits.

Some data points your insurer considers are braking hard, road conditions, cornering, and rapid accelerations. People with safe driving habits receive discounted premiums, while those with unsafe road behavior get charged higher premiums.

Here are several reasons to consider UBI.

Encourages Safe Driving

With a telematics device installed, motorists drive carefully because they know their insurer is tracking them. Such drivers are less likely to accelerate rapidly, brake hard, swerve in and out of traffic or do anything that may jeopardize their insurance rating. 

Moreover, UBI systems offer you suggestions on how to drive better and avoid repeating past mistakes. Consequently, you and other road users benefit from your safer driving habits. Your insurer also benefits because they are likely to pay out fewer accident claims.

Safe Drivers Enjoy Discounted Premiums

In traditional insurance systems, your insurer considers loads of historical data before giving you an insurance discount. UBI makes it easy to get low insurance rates, especially if you are a cautious motorist and drive within the recommended speed limits. In fact, some insurance companies offer some very attractive premium discounts for excellent driving scores.

Additionally, insurers consider motorists who drive for shorter distances or those who don't drive during heavy peak hour traffic as low-risk clients. Such drivers get low mileage discounts and may also enjoy very generous premium discounts. So, if you work remotely and don't accumulate lots of mileage annually, you can switch to UBI and earn rewards for driving less.

Simplify Accident Investigations and Stolen Vehicle Recovery

The telematics device installed in your vehicle records everything in your car, including the events before a collision. So, when a crash occurs, the investigators can analyze the registered data by the UBI system. Telematics provides information about the vehicle's direction, speed, braking intensity, and acceleration at the time of the accident.

With such data, the authorities can easily determine who is to blame for the accident or what caused it. Additionally, claims adjusters settle claims accurately and within a reasonable time. Also, the data collected by UBI systems help insurers detect and avert fraudulent claim settlements.

This tech also makes it easy to find a stolen vehicle. Since UBI is a tracking technology, your insurer and authorities can quickly establish the location of your stolen vehicle and recover it.

If your insurer offers discounts for safe driving, you can switch to usage-based insurance to cut your insurance costs. Don't forget to enquire about the exact details the telematics device will be tracking before you append your signature. 

For more information, contact a local auto insurance agent.