(WMC/CONSUMER REPORTS) - Imagine paying less for car insurance just for being a good driver. It’s called usage-based insurance: Drive safely and keep to certain mileage limits and you could save a bundle on premiums. But it also means having your insurance company track how you drive, and that could drive you up the wall.
Consumer Reports explained major insurance companies like State Farm, Nationwide, Allstate, and Liberty Mutual offer the program.
Using a smartphone app and a tag or dongle, they monitor acceleration, braking, cornering, speed, and phone use, and provide a score.
If your score indicates low-risk driving, your premiums could be reduced significantly, in some cases up to 50%.
To get the discount you’ll also need to watch how far you drive. For example, State Farm considers 7,500 miles a year or less to be low mileage.
But if your driving suggests risky behavior, some insurers could charge you even more. And while some companies said they don’t share your information, privacy may be a concern for some people. If you’re in an accident, your information can be used, for example, by law enforcement.
To keep your car insurance costs low, make sure you’re taking advantage of all available discounts. Ask about discounts for the safety and security features built into your car, student discounts, and discounts for maintaining a good credit score.
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