Plug-in devices, or technically known as Usage-Based-Insurance or UBI devices, are as well as all other technology in 2019, already outdated by the time you read this. The premise is the same, insurance company monitors your personal driving factors, most commonly: hard-breaking, rapid-acceleration, annual miles driven, and time of day you are on the road; and if you drive well during the trial period, you can earn a (potentially substantial) discount. However, nowadays, there is no need for a primitive plug-in device. Many insurance companies have made the transition to a mobile app on your smart phone, that uses the same measuring tools that common running and fitness apps use, to track your driving habits. A few companies still have the plug-in device, and a few companies give you the option between the two. So, is it a good idea?
Well, you are going to hate our answer: We don’t know. It is not our place to tell you if we like it or not, or to give our political opinion about how big brother the idea is, or anything like that. What we will do is tell you what your specific device or app measures, what the up-front discount is to participate, and the discuss the potential impact on your premium at the end of the program. Then you can decide if it fits your lifestyle. In our experience, some people love it, some people hate it. Some people who we thought would hate it, loved it. You are the only one that knows, but many customers are enjoying great discounts by giving it a try.
The idea behind it is simple: Insurance companies charge you a relatively small premium in exchange for a promise to pay a much larger cost if you experience a loss. These losses can equal hundreds of thousands or even millions of dollars if bodily injury is caused. Insurance companies spread the risk of a loss out among thousands of customers paying premiums. The amount to charge a customer has historically been based on vague criteria, such as age, gender, number of claims, and credit score. Good info to use, with much data available, but not perfect. UBI helps insurance companies price their insurance better. When insurance companies experience profit as opposed to loss, premiums are lower for EVERYBODY! Premiums historically increase when insurance companies need to recoup losses from the past year. UBI is a step in the right direction.
Finally, a note on “Is this too big brother?”: A few years ago, we may have blindly agreed that it was. You may still think it is. That may very well still be valid. However, we will say that the insurance companies are not the only ones tracking you and your habits. Many of your favorite apps do this day in and day out. At least this program is offering you savings to do so.
Be sure to ask your agent about your specific program with your insurance company. Ask for a brochure from the company and talk it over with all drivers involved. Keep Aspire Insurance Agency in mind if you are looking for a change!
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