Usage-based auto (UBI) insurance, also referred to as PAYD (pay-as-you-drive) or PHYD (pay-how-you-drive) insurance, is a new type of auto insurance where the premiums are dependent on the driving behaviors such as time spent on the road, distance covered, and the places where you drive. This is different from the typical auto insurance which tends to reward safe drivers by giving them lower premiums while imposing higher rates for those who have been labeled “high-risk drivers.” UBI involves installing a telematics device in your vehicle that monitors and records your driving habits such as speed, mileage, and location.
Some of the benefits of investing in user-based auto insurance with The Shay Agency in Wilkes-Barre, PA are:
Drivers are able to control their premium rates
Since the premium rates are dependent on driving habits, drivers are enticed to adopt safer driving habits and reduce mileage. This, in the long run, reduces accidents on the road which are beneficial to society.
The use of telematics offers safety benefits such as tracking stolen vehicles, monitoring driver safety, and improving accident response time. It also allows drivers to determine the most effective routes hence saving on gas and maintenance costs.
If a policyholder makes changes to their daily routines that would reduce the number of times they use their vehicle, for example, working from home, their premium reduction will take effect immediately.
If drivers take into account good driving habits, they will most likely pay lower premium rates. Plus, those who are currently paying higher premiums because they are considered high-risk drivers can switch to this arrangement and pay according to their current driving patterns.
The major downside to this insurance plan is that it raises privacy issues since the vehicle has to be tracked 24/7, but with the rising technologies, there’s room for improvement. Embrace UBI and change the future of auto insurance. Contact The Shay Agency in Wilkes-Barre, PA to learn more about the coverage options you can choose from whether you live in Pennsylvania, New York, New Jersey, or Florida.