Pay-As-You-Go Car Insurance?

Sure, you’re a safe driver. You may even get a discount for being a safe driver; but, what if your auto insurance company was able to calculate your rates based on your driving habits? Everyone knows that insurance costs are based on several different factors such as age, marital status, and even the number of accidents that happen in your area can influence your insurance rate.  However, insurance companies have now found a better way to calculate risk (and give some awesome discounts in the meantime) by personalizing the rate based on the way YOU drive! Many carriers are offering a device to plug into your car for them to analyze how you drive and then rate accordingly. They will look at things like how fast you drive, how often you drive, how frequently you brake, etc.

There are some great benefits of telematics (that’s what it’s called, by the way!). First, the obvious, you can earn some really sweet discounts for good driving habits. Second, it is reducing insurance fraud across the industry (which, again, helps with rates). Third, it can help recover stolen vehicles more quickly. Lastly, it is opening up conversation on great teaching opportunities. We can all learn new things, and having telematics in your vehicle can show you areas where you become a safer driver - whether it’s on hard braking, speeding, time of driving, etc. Plus, it can also be a great tool for our new teen drivers to help them adopt good driving habits!

With news like that, what can be bad? As great as those options are to improve the insurance industry, you’d be right in thinking that there might be some challenges. First, there are some drivers who are concerned about their privacy. In this digital age, there are many ways to track information, like smartphones, GPS devices, and social media, but it can make some clients a little nervous to allow that type of information sharing for your vehicle. Second, you may not save anything or have your rates increased. An aggressive driver that commutes during rush hour traffic at long distances could actually have their rates increased for the extra risk exposure.

So, to monitor or not to monitor, that is the question! By and large, this is a great opportunity for many drivers to lower their insurance costs. It is transforming the auto insurance industry with no sign of stopping. Be sure to speak with your Bouchard agent to see if your policy has an option for telematics and how that could possibly affect your auto insurance rates.

About the Author

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Christin Snow is a Personal Lines Account Manager at Bouchard Insurance. Christin is experienced in all lines of personal insurance. | Connect on LinkedIn