The Complicated World of Insurance Made SimpleThe Complicated World of Insurance Made Simple


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The Complicated World of Insurance Made Simple

When I bought my first home, I had a real estate agent lead me through the entire home-buying process. This made it simple and easy for me. However, when it came time to choose a homeowners insurance policy, I became very confused about what made up a good policy. I started by doing a lot of online research into what homeowners insurance features were needed in my area and then finally called an agent who led me step-by-step through choosing the policy that was best for me and my home. I learned a lot during my research and time spent talking to my agent. I have also learned a lot about other types of insurance over the years, so I thought I would start a helpful blog all about insurance. I enjoy helping others, so come back often for new tips!

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Want To Buy Usage-Based Auto Insurance? Here's What You Should Know

Before buying any form of auto insurance plan, it's vital to consider all the available options and choose the most suitable one. One of the plans you can consider as you research is a usage-based car plan. That said, you may want to know how this policy compares with the rest of the vehicle insurance plans. Ultimately, this will help you determine if it's the best plan for you. Here are essential things you'll need to know about usage-based vehicle insurance (UBI).

What's a UBI?

When you opt for usage-based coverage, you should know that your driving determines the premium rates. Given this, the insurance company will charge lower rates if you rarely drive your car or have excellent driving skills. In addition, your location, age, and the time of day you like to drive will also dictate your premium. As such, if you reside in a safe area and only use your vehicle when there's no traffic, you will improve your chances of getting a lower premium.

Which Factors Do Insurance Providers Consider in UBI?

As the coverage name suggests, this plan depends on car usage. Hence, your payment will vary based on how often you use the car rather than paying a flat premium rate every month. Given this, daily car use means you will take in more risks, increasing the premiums. On the other hand, if you use your car once in a while, you'll slash the insurance expenses and get a fair rate.

The insurance company will also consider the distance you drive, speed, braking style or frequency, and acceleration. In order to collect this information, your carrier will install a telematics device that records your drives. This data is then reviewed regularly to determine if you will pay a lower or higher premium.

Who Should Consider UBI?

Generally, this form of auto plan is suitable for individuals who do not drive long distances or use their cars as much. For example, the plan can be perfect for self-employed individuals who often work at home, students, and retirees. Additionally, individuals who own vehicles but prefer to use a bike, walk, or public transport are also great candidates. Therefore, if you fall into any of the categories and have good driving habits, you'll likely save a lot on auto insurance premiums in the long run.

With this information, it should be easy to determine if you need a UBI or other standard vehicle insurance plans. But if you don't drive regularly and have excellent driving habits, you should get this plan to reduce your rates.