It can be called black box car insurance, or usage based car insurance (UBI) but what is it? It’s what more and more insurance companies are beginning to offer as a feature of their coverage. A so called black box, or mobile phone app, which tracks how you drive, and saves you up to 30 percent on premiums.
Usage based car insurance bases your insurance costs on how and when you drive. Now your car will keep track of how safe a driver you are, and you will save money accordingly.
Started in the late 2000’s, usage based car insurance was a niche experiment by a selected number of insurance companies in selected regional markets. Because of the increased number of cars and smartphones, it has now become a mainstream offer by most insurance companies across North America and other areas of the world.
Drivers can access their driving history online or using an app allowing them to monitor their driving patterns and make needed changes to improve their chances for better discounts. Those discounts can be mileage based, or based on driving behavior.
UBI is expected to gain momentum and is likely to reach close to 100 million drivers by 2020. Millennials are also seeing the new tech as a cool thing because it is just another app for their smart phone, one that can save them money while making them safer drivers.
These insurance platforms will become increasingly important as we move towards a future of connected living. Soon, insurance companies will be able to use this data to redesign policies. Data from auto insurance will eventually be an extension of home, health, life and maybe even pet insurance policies.
Maybe this is the key to safer driving. Saving money is often the best way to get people to do the right thing.