The future of auto insurance is Usage Based Insurance (UBI). Your agent might have already asked you if you’d like to lower your insurance rates by using a driving app for several weeks for a discounted UBI rate. If you think you can completely opt out of this type of spying on your driving, you would be mistaken.
Usage Based Insurance
When UBI was just starting out, they would get your permission to attach an onboard device, or a telematic device, that’s also called an insurance dongle. These dongles record some of your driving habits like acceleration speed, braking habits, speeding and collisions, then they store this information for the insurance company to figure out a discounted or even an increased rate for the policy.
The insurance dongle’s problem for the policy holder is that it doesn’t know a different driver is operating the vehicle or the circumstances around the decision to brake hard or to speed. So, your auto insurance rate might go up unfairly.
The smartphone app is another method to track and save the same type of information, but an app allows for some user input which makes the process a little fairer. It will allow you to remove the driving session because another person was driving the car, for instance. So, this is what most drivers are using now when they’d like to get a discount on their auto insurance rates.
Insurance companies are all different in the rates they give for using these apps. Some insurance companies will raise your rates after they see your driving data. So, ask your company if they will hold it against you, because not all of them do.
Opting out of this type of driving information is not possible. While giving this information to your insurance company is currently optional, the data is collected by your car’s hard drive already. This data can be tapped into and read by law enforcement or anyone else with the ability to access it. So, if you don’t want big brother collecting data on you, you’ll need to drive an old car that doesn’t have a computer onboard.
