The Pros and Cons of Insurance Driving Trackers
Technology that tracks vehicle use and performance has ushered in a new type of insurance, Telematics Auto Insurance, also known as usage-based insurance (UBI). Devices monitor how far and the way you drive and adjust auto insurance rates
accordingly. Some insurance companies provide a smartphone app; others ask you to install a device on the vehicle.
How do you know if telematic insurance might be right for you?
Here are some of the pros and cons:
- Drivers who drive more safely and avoid consistently driving late at night, driving during rush hours, staying off the phone, and avoiding hard braking, quick acceleration, speeding, and cornering may save money on insurance.
- Those who drive fewer than 12,000 miles annually may save.
- Those who sign up for a telematics program may earn initial discounts and rewards - and additional rewards can be earned later for being a "safe driver," as defined by the insurance company.
- Those who opt for telematics may save 10 to 40 percent annually on premiums.
- Participants relinquish data privacy. Most telematics auto insurance programs use a GPS tracker of some kind, so the insurer knows how far you're driving and where. And many app-based insurance programs allow insurance companies to see where you are at all times ... not just when you're driving.
- Those who drive late at night or during rush hour and who hard brake, accelerate quickly, speed, etc. may be considered a "poor" driver, negatively affecting rates.
- Those who drive a lot of miles annually may pay more.
Want to find out whether telematics/usage-based insurance is right for you? Talk to your Advisor at Hummel Group.