Usage-based auto insurance can save money for Washington drivers who drive fewer miles, avoid late-night trips, and rarely brake hard or speed. But it doesn't save everyone money. The Washington State Office of the Insurance Commissioner notes that premiums under these programs “may go up or down depending on your driving behavior,” so whether you come out ahead depends on how, when, and how much you drive.
Ads for driving-tracker apps often focus on the discount. Here's a clearer look at how Usage-Based Auto Insurance Washington programs work, who tends to benefit, and what to think about before you enroll.
According to the Washington State Office of the Insurance Commissioner (OIC), usage-based insurance is when “an auto insurer monitors and tracks your driving behavior to determine your premium.” The data is combined with traditional rating factors, such as your driving record and vehicle, to set your price.
There are two common types of programs:
These programs track driving habits through a smartphone app or a device plugged into your vehicle. Safer driving can lead to a lower premium.
These programs focus mainly on how many miles you drive. They often combine a base rate with a per-mile charge, which can appeal to people who don't drive much.
The OIC and the National Association of Insurance Commissioners (NAIC) list several data points insurers may monitor:
Each insurer weighs these factors differently, so the same driver could score well in one program and poorly in another.
Usage-based insurance tends to work best for:
If your commute from Black Diamond, Maple Valley, or Enumclaw only happens a couple of days a week, a mileage-based program might be worth a look.
The NAIC cautions that while “commercials for UBI promote the discounts drivers can receive, it can also lead to higher premiums.” The OIC adds that not all drivers qualify for discounts because they must meet the company's risk standards.
Usage-based programs may be a poor fit if you:
Puget Sound congestion can make smooth driving harder. Sudden slowdowns on busy highways may register as hard braking, even when you're driving carefully.
Rain, fog, and winter conditions in the Cascades can affect driving patterns. Drivers who head to the mountains for winter recreation may drive more miles, and tougher conditions may show up in their data.
A discount doesn't change the coverage you need. Washington requires drivers to carry at least $25,000 for injuries or death to another person, $50,000 for injuries or death to all other people, and $10,000 for property damage, according to the OIC. These are legal minimums. Many drivers choose higher limits, along with coverages like personal injury protection (PIP) and uninsured and underinsured motorist coverage, for stronger protection.
The OIC points out that “insurers tracking your driving behavior may raise some privacy concerns,” since you're sharing location and driving data with your insurer. Before you enroll, read the program terms and find out:
The OIC suggests asking yourself and your insurer:
It's also worth asking whether your rate can go up based on the data, or whether the program only offers discounts. Program rules vary by insurer.
Usage-based insurance is just one way to lower your premium. Depending on your insurer, you may also qualify for savings through:
Comparing these options side by side can help you decide whether a tracking program is worth the tradeoff.
Usage-based auto insurance can be a smart way for some Washington drivers to save, especially low-mileage, careful daytime drivers. For others, it may offer little benefit or even cost more. The best approach is to take an honest look at your driving habits, understand the program's rules, and compare it with your other options.
Since 1986, Humble Insurance Group has helped drivers across Washington find auto coverage that fits their lives and budgets. Our team can review your current auto insurance, explain how a usage-based program could affect your premium, and compare it with other ways to save. For business vehicles, our post on GPS tracking and commercial auto insurance covers how tracking technology works on the commercial side.
Thinking about a driving app or plug-in device to lower your rate? Contact us today to talk through your options and see whether usage-based auto insurance in Washington makes sense for you. Call us today: (425) 226-8221
It can. The Washington State Office of the Insurance Commissioner says premiums “may go up or down depending on your driving behavior.” Some programs only offer discounts, so ask your insurer how its program works before you enroll.
Savings vary by insurer, program, and driving habits. Low-mileage drivers with safe habits tend to see the most benefit. Ask for an estimate and review the program rules before signing up.
Depending on the insurer, programs may track miles driven, time of day, location, rapid acceleration, hard braking, sharp turns, phone use, and airbag deployment.
It can be a good fit if you drive relatively few miles, such as if you work from home or use your car mainly for errands. Drivers with long daily commutes may not save much.
