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The proliferation of usage-based insurance options, recent changes in driving behavior and more available transportation options are reasons Insurance Commissioner Teresa Miller is urging Pennsylvania drivers to review their auto insurance and explore ways they may be able to pay less for the coverage they need.
“People working from home, cities establishing bikeways, and the availability of transportation network companies (TNCs) such as Uber and Lyft, are reasons some people are driving less and why they may be able to get the coverage they need for less money,” Commissioner Miller said.
Commissioner Miller also noted that over time, families’ driving patterns change. A family member may retire and no longer be commuting to work, or may change jobs and work much closer to – or even from – home, or a dependent child may go off to college, leaving their vehicle at home.
“I would advise consumers to speak with their insurance professional about any household or driving habits that may have changed to see if and how their premiums could be reduced,” said Commissioner Miller.
Usage-based insurance (UBI) has recently emerged as an option in which drivers’ premiums depend in part on driving habits. UBI works by monitoring driving habits through an app or through a device that plugs into the vehicle. According to the National Association of Insurance Commissioners (NAIC), the specific driving elements that are monitored include miles driven, time of day, where the vehicle is driven, rapid acceleration, hard breaking, hard cornering, and air bag deployment. After all of these elements are taken into consideration, drivers’ premiums could be lowered based on noted driving patterns. The NAIC provides a DriveCheck assessment on its webpage for consumers to gauge the likelihood of whether usage-based insurance may be beneficial.
“In Pennsylvania, if you opt into a UBI program, your rates cannot go up solely because of information gathered by a UBI device,” Commissioner Miller said.
However, consumers need to be aware that if they are currently receiving a discount on their auto insurance premiums because of opting into the UBI program, information gathered through a UBI-monitoring device could result in this discount being reduced or dropped. Rates can also rise for reasons unrelated to participating in a UBI program, such as the company’s filing for an overall rate level increase.
Commissioner Miller stressed consumers should discuss UBI thoroughly with their insurance professional before deciding whether to install a device, and that UBI is strictly voluntary on the part of the driver in Pennsylvania.
Whether usage-based insurance is right for you or not, Commissioner Miller noted that it is important to ask questions and talk to your insurance professional. There could be other discounts that apply to your current situation, including safe driver, good student, and driver’s education discounts, as well as options to bundle auto coverage with homeowners or renters insurance.
