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Usage Based Car Insurance Becomes a Savings Hit for Drivers

Have you heard of the pay-as-you-drive or usage based auto insurance coverage? More than a million drivers across the United States have, and are already taking part in it, in an effort to save money on their auto insurance rates. “Technology has come to almost every part of our life and auto insurance is no difference. If you have a safe driving record and you have good driving habits you might consider an insurance company that gives discounts when they monitor your driving behavior through a vehicle tracking system,” Angie’s List Founder, Angie Hicks said.

Experts said that most drivers enrolled in the program release information about their driving habits, such as how fast they drive, mileage, when they drive, and how hard they apply their brakes. Large insurance providers such as State Farm, Allstate, and Progressive, monitor these driving habits through programs such as OnStar or through a vehicle tracking device that plugs into a port under the car’s dashboard. “I didn’t get a very good grade in braking (laughs) so I’m trying to be more aware of that now,” said Lyndi Cook, who enrolled in the program in an effort to save money. Her outcome? “Our next renewal coming up we saved ten percent on one vehicle and five percent on another,” Cook said.

Allstate Insurance Agent Ranjit Puthran says that this new insurance option is great for parents and teens. “It’s perfect for a young driver. If you have a young driver, a teen driver, and you want them to see how they are driving, what their driving history is, what their habits are – that’s a great way for a teen to look at their driving habits and correct those,” Puthran said.

But as good as the savings sound, some drivers are still not convinced. They feel that this new technology infringes too much on their privacy and they don’t want their car insurance company eavesdropping on their driving habits. Hicks advises consumers to read and understand the fine print in these pay-as-you-drive policies. “It does not penalize you for your driving history. It only rewards you, those safe drivers that are driving safe. Right now the average savings for a safe driver is 10 percent,” Puthran said.

If you’re still not convinced, the good news is that there are other ways in which you can save money on car insurance:

•    Talk to your insurance agent about any discounts they may offer such as a good driver discount, low mileage, good student discounts, etc.
•    Some providers provide discounts if you pay your insurance policy in full
•    Multi-vehicle insurance discounts are available for California drivers. Save money by insuring multiple vehicles under the same car insurance policy.
•    Bundle your car insurance with your homeowners insurance or any other policy your insurance provider, provides.

So, what do you think of the pay as you drive car insurance option? Will you be using it in order to save money your car insurance?


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