The way individuals used to buy car insurance has drastically altered because of technology. The incorporation of cutting-edge systems into insurance products has made insurance more individualised. Since flat-rate third-party car insurance doesn’t work for everyone, additional specialised insurance options are required
Usage-Based Insurance (UBI): What Is It?
Unlike traditional auto insurance, usage-based insurance bases the calculation of your insurance price on the quantity of driving you do. Your driving habits and distance driving both play a significant role in determining your vehicle insurance cost. The insurer determines your insurance price using information like your driving speed, acceleration rate, braking pattern, and if you use a phone while driving. Such insurance encourages safe driving and enables you to lower your premiums if you don’t use your car frequently. ##
How Does UBI Function?
UBI monitors how the automobile is driven via a telematics device that is put in the vehicle. Telematics tracks and distributes driving data through the use of communication and informatics. It records driving data like speed, braking, acceleration, and usage frequency using advanced analytics. Utilising this data, the car insurance provider assesses the driver’s driving style and risk profile to assist in setting the rate.
The auto insurance provider monitors your driving, gathers driving information, and creates reports to create your profile in any of the ways listed below;
- Telematics device – The insurance provider will offer this device for you to place in your vehicle. It keeps track of your driving habits and records all the driving data. This gadget is quite dependable and can be professionally installed. It offers factual information. Cars today come with integrated telematics systems.
- On-board diagnostics (OBD) sensors – You can self-install these sensors into your car’s OBD port. Real-time driving data can be stored and shared by these sensors.
- Plug-In gadget – This self-install gadget likewise plugs into your automobile and works similarly to a pen drive.
- GPS device – Sharing and tracking driving data is also done using advanced GPS devices.
- Mobile app – No installation or external equipment is needed. The smartphone of the car driver can function as a telemetric device with the aid of a mobile app. The car’s motion is tracked by the app and shared. When it comes to claims, this option is less trustworthy than others.
Different UBIs
Usage-based motor insurance comes in many different forms, and the cost is determined by the parameters you choose.
- Pay As You Drive – With this type, the premium is determined by the amount of mileage covered. You can select a distance slab based on how you want to use it.
- Pay How You Drive: For this type, your driving habits, including your speed, acceleration, and braking patterns, are used to determine the premium.
- Pay As You Go – This kind combines the first two kinds. It works like a subscription where you are billed for travel time or distance. It is perfect if you are borrowing or renting a car because it is taken for a set amount of time.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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