Usage-based insurance (UBI) is a type of automobile insurance whereby the premiums are dependent upon factors such as the type of vehicle, time of use, distance driven, place and various behaviors such as sharp turns or hard braking.
Auto insurers want to align the driving behaviors of an individual with premium rates for auto insurance.
Normally a telecommunication device (telematics) is self-installed into a special vehicle port. The telematics device monitors a driver's behavior directly while the person drives. This telematics device measures a number of elements such as when, where and how long the vehicle is driven, sudden driving maneuvers and airbag deployment. The insurance company then assesses the data and charges insurance premiums accordingly.
It is possible that a telecommunication device can interfere with your vehicle’s computer. If that happens it is important to stop using the device and see your local auto mechanic.
No, right now UBI is not required by any company. It is completely optional. Consumers should ask their insurance agent or company about UBI.
Consumers should ask for information directly from the company on how UBI will impact premiums. UBI could be used to discount or add to the premium depending on how the company requests to use it in North Dakota.
Several companies in North Dakota currently offer UBI programs. Consumers should ask insurance agents or contact companies directly for more information. Visit the National Association of Insurance Commissioners (NAIC) State Based Systems (SBS) Lookup to search for companies selling auto insurance in North Dakota.
UBI programs may allow consumers the ability to control their premium costs by incenting them to reduce miles driven and adopt safer driving habits.
The practice of tracking mileage and behavior information in UBI programs has raised privacy and discrimination concerns.