Usage-base insurance is about more than just a discount

Despite its different approach, the goal of rewards based UBI program remains the same: improve driving behavior to make roads safer for everyone. (Credit: JustSuper/Adobe Stock)

It should come as no surprise that consumer interest in usage-based insurance (UBI) programs increased as an effect of the pandemic. More time at home, fewer hours in the car commuting to the office and an overall embrace of digital capabilities were all factors inspiring an uptick in consumers’ willingness to embrace UBI offerings. The idea that “I drive less so I should pay less” encouraged more than 54% of drivers to say they felt comfortable sharing information on miles driven, according to CCC Information Service Inc.’s 2021 Crash Course study.

But now, with public health restrictions being lifted and roadways largely back to pre-pandemic traffic levels, many insurance shoppers may begin to question whether a traditional UBI program is the right fit. While common UBI offerings provide an upfront discount, then measure driving data to determine whether the customer should keep all, some or none of the discount, we at Plymouth Rock believe there is another — perhaps more effective — approach to telematics.