How does usage-based car insurance work?

Being a good driver has its perks. Providers look to reward those drivers who are defensive and careful. Insurance companies even have usage-based car insurance programs to reward their policyholders.

Many insurance providers have devices for their usage-based car insurance programs, but what are smart ride devices exactly, and how do they work?

Do they really help you lower your insurance rates? Let’s answer these questions and see how to keep your insurance rates low.

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What are smart ride devices, and how do they work?

Smart ride devices are objects that record your driving habits. Nationwide uses them, and so does Progressive. They attach to your car below the steering wheel and use telematics, which is a system that is used to calculate statistics like speed.

Usually, the smart ride device will make a noise when you stop abruptly or make a sudden turn. It sends the information that it records about your driving habits to the insurance company. You can use these devices on all types of vehicles from used cars to brand new cars.

How do smart ride devices help lower your insurance rates?

These devices help lower insurance rates by showing the insurance provider your superb driving behaviors. Rates can drop as low as 40% if the smart ride device shows that you are a good driver. 

Providers love to reward drivers for their excellent driving behaviors. Make sure to ask your insurance provider what options they have for discounts based on smart-ride devices. 

Ways to Keep Your Car Insurance Rates Low

In addition to telematics devices, there are many ways to keep your car insurance rates low. These ways include:

Avoid Getting Violations on Your Driving Record

Insurance providers will start to see you as a high-risk driver when you get moving violations on your record, and your rates will increase. Avoid getting these to keep your insurance rates low. Make sure to obey the traffic laws wherever you go and be a defensive driver. 

Reduce Coverage on Your Older Car

Reducing coverage on your older vehicle will help keep your rates low. Older cars are less expensive to maintain than newer ones. Even a used car could probably be okay with less coverage. 

Apply for as Many Discounts as You Can

When you apply for a smart ride device, you automatically get a 10% discount on your insurance rate. See what other price cuts you could qualify for through your provider or agent. There are many deals to choose from, including good driver and loyalty discounts. 

Bundle Multiple Insurance Policies

Bundling insurance, particularly home and auto, is a great way to save on those monthly premiums. If you know your provider also deals with life insurance, make sure to bundle that too. You can save as much as 25% on each policy. 

Good Things Happen to Good Drivers

Good things indeed happen to good drivers. When you’re a good driver, your car will be in good health and easier to maintain, your insurance rates will stay low and affordable, and the likelihood of you getting into an accident will be lower.