Budget Concerns: How Much Insurance is Enough?

Budget Concerns: How Much Insurance is Enough?

Is Use-Based Auto Insurance Right For You?

Dustin Duncan

Auto insurance comes in all kinds of types, coverage levels and costs, and finding the right option for your budget and your needs can sometimes be difficult. Understanding the different options can help you to select the right coverage. One option to explore is use-based auto insurance. This type of policy examines your driving habits with the use of a telematics device in your car. This device delivers information to your insurance company, such as how many miles you drive and how fast you drive. The information is then used to determine your rates. Take a moment to familiarize yourself with this type of insurance to see if it is right for you.

Your Driving Habits May Earn You A Discount

Insurance companies sometimes offer discounts for limiting how much you drive. When you are on the road less, there is less of a risk you'll be involved in an accident. This is good news for you and the insurance company, and your insurer may reward you for this with a discount. When you have a use-based policy, the insurance company can see how much you drive to determine your eligibility for a discount.

Be Ready To Share Your Information

Your insurance company may be able to collect data on how often you slam on the brakes (known as hard-braking), how often you drive over the speed limit and how often you engage in other types of risky driving behaviors. They can also tell what time of day you drive your vehicle. While this may not seem like a bad idea to some, it does mean giving up some of your privacy. You'll need to balance your need for privacy with your hopes of getting a discount to determine if use-based insurance is right for you.

Good Drivers Get Better Rates

Of course, the benefit of use-based insurance is that your good behavior can result in better prices for your coverage. This goes beyond just a safe-driver discount you might get for not getting in an accident. Use-based insurance lets you prove that you practice safe driving habits. A recent study reports that about 70 percent of drivers who sign up for this type of insurance plan drive well enough to save money. If you consider yourself a safe driver, use-based insurance might be right for you.

Whether you are looking to replace your insurance policy or you are looking for your first policy, use-based insurance offers a unique option. Talk to your insurance agent to see if this is the right choice for you, your car and your driving habits.


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About Me
Budget Concerns: How Much Insurance is Enough?

Insurance is something that I carry in the hopes that it never has to be used. Along with life coverage, I also have low cost auto insurance and a health plan through my employer. I'm toying with the idea of adding some additional coverage, just in case something happens and I'm no longer around to take care of my family. The question that is on my mind is how much insurance is enough? Do I really need more, or would it be better to cultivate other assets that my loved ones can draw on if needed? If you are in the same boat, let's journey together for a while. Read on and I'll explain what I'm trying and why. Together, we can figure out when it is time to add more coverage and when enough really is enough.