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Would You Let Your Insurer Monitor Your Driving For Better Rates?

17 August 2023

Sherri Ramos

You want cheap car insurance. As a result, it makes sense to look into ways to reduce your rates. One example is improving your credit score, while another is choosing a safer car that's of little interest to car thieves. If you're determined to get cheap auto insurance, you can go further by letting your insurer track your driving. This isn't guaranteed to get good results. However, this is becoming a more popular way to get better rates by showing your insurer that you have safer driving habits.

How Does This Work Financially?

Many ways to reduce your rates work by reducing your perceived riskiness. Investopedia says this matters because your insurer wants to collect premiums without making payments. A less risky client makes it likelier it'll be able to do so. Something that makes for a more reliable income stream. Every business values this. Due to this, your insurer has reason to reduce your rates if you can show you're less risky. Otherwise, you might switch to a more responsive competitor. Letting your insurer monitor your driving gives it the information needed to assess your riskiness accurately. If you think you have safe driving habits, this is the best way to convince your insurer to believe the same.

How Does This Work Technologically?

There is more than one way to monitor driving habits. Specifically, U.S. News & World Report says insurers use mobile apps or plug-in diagnostic devices to do so. Either way, they're interested in data that can fill in the details of how you drive. Common examples include but aren't limited to your speed, braking, acceleration, drive times, and phone usage. Luckily, you don't have to guess what you'll reveal because your insurer should tell you exactly what data will be collected before you sign up. If you aren't told this, you should ask about it. Moreover, if you can't get it even if you ask for it, you shouldn't sign up because being informed is the best way to protect your interests.

Is This Guaranteed to Give You Cheap Car Insurance?

Please note that letting your insurer monitor your driving isn't guaranteed to give you cheap car insurance. You're giving it the data it needs to assess your riskiness accurately. If you're a safer driver than your insurer expected based on what else it knew about you and your car, you can get incredible discounts on your premiums. Unfortunately, the reverse can happen. Ask your insurer how the collected data will be used to assess your riskiness. This way, you can give yourself the best odds of predicting whether being monitored will work out for you. Remember that you will sacrifice some of your privacy even if you get reduced rates. Interested parties can figure out much about you using the collected data. As such, you should look elsewhere for ways to save if you're uncomfortable with this prospect.

For more information on cheap car insurance, contact a professional near you.

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