News & Resources

How Much Can Good Drivers Save With Usage-Based Auto Insurance?

Nov. 22, 2021
2 mins
A couple and their dog stop by a river on a road trip

People gain experience with time, and when it comes to driving, the more hours logged behind the wheel, the better it can be for your car insurance premium. Those with lengthy driving histories and immaculate driving records can see sizeable savings.

Many car insurance companies offer “safe driver discounts,” as drivers spend more time on the road or hit significant life milestones.

Every insurance provider is different, but generally, drivers can see their premiums start to drop three to five years after they get their driver’s licence. It applies to both young and old drivers, depending on the amount of experience they have. However, there are a few stipulations. Drivers are typically required to be accident-free, violation-free, and claims-free to see a reduction.

Nevertheless, one way to potentially lower your auto insurance premium can be to enroll in a usage-based insurance (UBI) program with your insurance provider.

car mascot.png

Don't waste time calling around for auto insurance

Use RATESDOTCA to shop around, and compare multiple quotes at the same time.

What is usage-based insurance?

UBI software, also known as telematics, tracks how fast you are driving, accelerating, braking, and cornering, the length of your trips, and what times you are typically on the road. Some can even track if you are distracted while driving. The programs are usually accessible through a mobile app but can also be hardwired into your vehicle. Each insurance provider will have a different name for their respective UBI programs; however, they typically work the same way — rewarding good drivers for their safe driving habits.

Related read: Apps That Monitor Your Driving May Save You Some Bucks

Usually, the UBI app will give drivers a rating or score at the end of the data collection period, resulting in an insurance discount of up to 25% upon renewal. However, some insurance providers will offer a small discount just for signing up. For instance, drivers may get a 10% discount immediately after enrolling in their insurance provider’s UBI program. In this case, the additional discount would be contingent on the driver’s score.

That means practiced drivers and less experienced ones may be able to save based on how they drive rather than how long they have been driving.

Formerly, the information insurance providers gathered from UBI could not be used against drivers. In November 2020, Ontario changed the rule to discourage high-risk driving. Those who exhibit such behaviours may face a surcharge because they pose a greater risk on the roads.

UBI may help you save on your car insurance

UBI is great, but it may not be for everyone. Talk to your insurance provider or check out reviews online to see how people liked their experience with the technology. Enrolling in a UBI program may help you save money on your annual auto insurance premium.

Hayley Vesh

Hayley Vesh is a creative, resourceful, and knowledgeable content producer who is passionate about financial literacy, storytelling, and generating ideas. She writes about credit cards, savings, debt management, and personal finance. In her spare time, Hayley can be found wandering in the woods, hunting for second-hand treasures, or curled up with a steeped tea and a good podcast.

Latest auto articles

3 Ways to Protect Your Wallet This Black Friday
Travelling south for the spending frenzy? Ensure you have the right auto and credit card coverage.
Learn More
3 mins read
Brace Yourself for Parking Lot Mayhem This Black Friday
Deal hunters expected to descend on the malls en masse on Black Friday will make parking lot driving riskier than usual.
Learn More
2 mins read
Tips for Buying a Fuel-Efficient Vehicle
Here are some simple tips for finding a fuel-efficient vehicle to help you decide on the best choice.
Learn More
3 mins read