3 Benefits of Usage-Based Insurance

Usage-based car insurance is a type of auto insurance that uses driving data to help determine your insurance premium. Through a mobile app or connected device, these programs may track driving habits such as mileage, speed, braking patterns and the time of day you typically drive. By evaluating how, when and how much you drive, insurers can gain a more personalized view of your driving behavior. 

One of the key benefits of UBI is the opportunity to earn savings for practicing safe driving habits. In many programs, including Driveology^®, the safer you drive, the more you may be able to save on your auto insurance. 

Not only can UBI programs help save you money, but they also encourage safer driving behaviors behind the wheel by providing insights into driving patterns and promoting mindful driving habits. Here are some benefits of UBI. 

How Does Usage-Based Insurance Work?

Usage-based car insurance works by collecting driving data through a mobile app, a plug-in device or a connected vehicle feature. After enrolling in a UBI program, it gathers information about your driving habits over time – like driving frequency, braking and acceleration patterns and phone use. This data helps provide insurers with more insight into your driving behavior than traditional rating factors alone. 

Your insurer uses the information gathered from UBI programs to calculate potential discounts or personalized rates, meaning safe driving habits may be rewarded with lower insurance costs. 

Usage-Based Insurance Benefits 

1. It Can Help You Save Money

One of the biggest advantages of UBI is its potential to help you save money through safe driving. Drivers who consistently demonstrate safe habits to reduce risk on the road may qualify for lower insurance rates. Because a premium is based more on driving behavior, UBI can give drivers greater control over what they pay. Keep in mind that savings will vary by the insurer and their program requirements. 

2. It Can Be Helpful for Low-Mileage Drivers

Drivers who put fewer miles on their vehicles each year may benefit from being enrolled in a UBI program. People who work from home, are retired or simply spend less time on the road have fewer opportunities to be in an accident, which can lower overall risk. Unlike traditional insurance rating methods, UBI can better reflect how often you drive, helping align your premium more closely with your driving habits. 

3. It Can Provide Driving Feedback

Many UBI programs provide driving scores, trip summaries and personalized feedback to help drivers better understand their habits behind the wheel. These insights can help identify behaviors that may affect insurance rates. Feedback can be especially valuable for families with teen drivers, offering a way to encourage safer driving habits and track progress over time.

Is Usage-Based Insurance Right for You?

UBI may be a good fit if you are a safe driver or do not spend much time on the road. Drivers who work from home or drive infrequently are more likely to benefit from potential discounts. However, UBI may not be ideal for people with long commutes, frequent late-night trips or driving habits with aggressive acceleration, which could negatively impact driving scores. 

Before enrolling, review how the program tracks driving activity and how discounts or rates are calculated to determine whether it aligns with your driving habits and your goals. 

Find Out How Your Driving Habits Could Help You Save

With our Driveology^® program, your driving habits can only help you, not hurt you. Drivers enrolled in the program can save up to 10% just for signing up, with the average savings of $351 per vehicle¹. If you’re ready to see how your driving habits could translate into savings, talk with a Farm Bureau agent to learn more about what opportunities you have to save on auto insurance.