UBI is an innovation by auto insurers designed to better align driving behaviors with premium rates for auto insurance. Mileage and behavior-based measures are tracked using odometer readings or in-vehicle telecommunication devices (telematics). The basic idea of telematics auto insurance is that a driver's behavior is monitored directly while the vehicle is in use. These telematics devices measure a number of elements of interest to underwriters: miles driven; time of day; where the vehicle is driven (GPS); rapid acceleration; hard braking; hard cornering; and air bag deployment. The level of data collected generally reflects the technology employed and the policyholders' willingness to share personal data. The insurance company then assesses the data and charges insurance premiums accordingly.
To help determine if UBI may be a fit for you, check out the NAIC’s DriveCheck. The DriveCheck UBI Self-Assessment tool takes you through a few quick questions about driving habits while providing more information about how UBI works.
Usage-based auto insurance (UBI) allows insurers to track driving behavior to customize premium discounts and benefits for individual drivers. Think you are safer than average? Insure U's DriveCheck helps gauge how you might score before you agree to plug in your insurer's diagnostic device.