The wide-spread implementation of Usage-Based Auto Insurance (UBI) is on the horizon and will impact the way car insurance companies operate and determine rates. According to the National Association of Insurance Commissioners (NAIC), experts expect that 20 percent of all motor vehicle insurance in the U.S. will incorporate UBI in some form within five years.<\/p>\n
What is UBI? It\u2019s a pricing model being adopted by insurance carriers that will fundamentally alter the auto insurance industry. Insurers are offering it to consumers to monitor their driving habits with a telematics device (plugged into the vehicle’s on-board diagnostic port) in exchange for possible reductions on their insurance premiums. The device monitors the vehicle operator’s driving behavior and records data like speed, cornering and braking patterns over a specified time period.<\/p>\n
According to research by Strategy Meets Action, an East coast insurance consultant, over 70 percent of personal and commercial insurers have usage-based insurance plans. Most of the top 10 auto insurers already have UBI programs in place.<\/p>\n
Moreover, by the year 2020, one in five insurance company professionals predict usage-based insurance (UBI) will control more than 50 percent of the personal auto insurance market.<\/p>\n
According to Allstate Insurance:<\/p>\n
Progressive Insurance states more than 1.6 million drivers have used its Snapshot product since 2008, almost doubling the percentage of its direct channel customers who have tried Snapshot in the last two years, to about 35 percent.<\/p>\n
Is Your Privacy At Risk?<\/b><\/p>\n