Should You Let Insurance Companies Track Your Driving For A Discount?

Auto insurance companies are increasingly offering "usage-based insurance" rates that rely on cellular or GPS devices to monitor how you drive. These rates can offer significant discounts from what your traditional auto insurance might offer, but there are also trade-offs. Instead of using factors like your age, gender, marital status, location, vehicle type and your driving record, a usage-based insurance device (UBI) is activated via a mobile app or installed into your car's dashboard. It collects real-time data about your driving behavior including your vehicle's location, speed, distance, harsh braking, seat belt usage, fuel consumption, battery voltage, and engine data. Savings can vary from 5% to 40% depending on the type of driver. However there are some downsides as well such as the loss of your privacy.  Every location you go to is documented and while insurers claim this data is not handed over to third-parties for marketing, there is always the risk of a data breach. Plus the setup of these devices can be difficult, especially if electronics are not your thing. And let's face it, if you are a bad driver, your insurance rates might go up with real-time data fed t your insurance company. The bottom line is that if you're a very safe driver that doesn't worry too much about privacy, UBI will save you money. If you're not the best driver though, or you worry about handing over your data and the potential pitfalls that come with it, skip it and stick with traditional insurance.

SOURCE: Two Cents

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