The main factor that sets usage based car insurance policies apart from regular insurance policies is how the premium for usage based policies is determined. The amount of premium paid for usage based car insurance policies is dependent on the type of car you drive, the amount of hours you spend driving, the distance covered while driving, the amount of traffic on the roads you use, how hard you brake and how smoothly you go around corners.
When using a usage based insurance cover your car is fitted with a gadget which is commonly referred to as a black box which is used to determine your driving patterns. One of the situations where usage based policies should be adopted is when you pay for insurance but rarely use your car. Since the premium paid for usage based policies is determined by the number of miles you cover in your car, low mileage should translate into cheap insurance premiums.
Another situation which favors the adoption of usage based insurance is when you are in a group which is considered by insurance firms as accident prone. Insurance companies divide customers into groups depending on characteristics such as age, sex and marital status. Statistically some groups are more likely to be involved in accidents than others. You may fall into a group which is considered to be more prone to accidents thus forced to pay high premiums despite being a good driver. In this situation, a usage based policy can help reduce the amount of premium you pay.
One of the benefits of usage based policies is that it encourages responsible driving. Since the premium is calculated using real-time data from vehicles, drivers are highly motivated to drive more responsibly in order to reduce their premiums. Usage based policies also help conserve the environment by discouraging unnecessary driving.
Pay as you drive policies are implemented in several ways using different gadgets to monitor your driving patterns. The first method involves using a GPS fitted device which is used to monitor the location of your car, and your driving patterns. The main drawback of using GPS based systems is the violation of the driver’s privacy by recording their whereabouts.
The second system attaches to a vehicles on-board computer, and it can monitor your driving patterns without violating your privacy. Devices attached to your vehicles computer can be restricted from accessing your location data. This can guarantee your privacy and still collect the required data.
Give True Rate Insurance Agency, Inc. a call at 855-735-1600 today to see how a usage based Los Angeles car insurance policy can benefit you. Our agents are ready to help you find the Los Angeles car insurance policy that fits your needs, and your budget.