Best Usage-Based Insurance Companies

If you're a low-mileage driver, UBI auto insurance could be a great way to save money.

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Best usage-based car insurance companies

UBI — or usage-based insurance — is a modern take on car insurance. Rather than using traditional rating factors unrelated to your driving behavior, UBI uses telematics devices to track your driving habits and assigns premiums based on this data. Driving safely — avoiding high speeds, hard braking, or late-night driving — can earn you a discounted premium. Although usage-based car insurance is a relatively recent phenomenon, several companies have emerged at the forefront of this market.

Exploring UBI auto insurance providers
  1. How does usage-based insurance work?
  2. Root Car Insurance
  3. Metromile Car Insurance
  4. Is usage-based car insurance right for you?

UBI insurance companies: overview

While many companies use telematics devices to assign pricing, these providers aren't necessarily pure UBI insurers. These telematics-based programs are optional add-ons to traditional insurance policies available in some states. Two of the most popular UBI companies are Root and Metromile. While these UBI companies differ in how their car insurance premiums are calculated, they embody usage-based auto insurance most closely.

Compare rates from top UBI companies!

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Root Car Insurance review and information

Founded in 2016, Root offers a new take on auto insurance. According to Root, car insurance pricing should be based on your driving behaviors above all else. If you’re a safe driver but are paying more for car insurance because of your age or credit score, you might be able to find some savings through Root.

How does Root car insurance work?
  1. Download the app
  2. Complete a “test drive,” but make sure you have your smartphone with you in order to collect data
  3. After your test drive period, usually over the course of two to three weeks, you’ll learn if you qualify for Root. If so, Root will determine your premium.
  4. If you qualify, you can start your policy with Root.

Unlike other standard insurers, who might charge higher premiums based on demographics alone, Root may deny coverage or raise rates based on your driving behavior. Risky driving behavior may include sharp turns, late braking, and frequent night driving.

In theory, usage-based insurance isn’t ideal for drivers who exhibit risky driving behaviors. If you’re not a risky driver on paper, i.e., no accidents and great credit, the standard car insurance model might suit your needs. If you're an inexperienced driver with poor credit or other disqualifying factors, Root might be worth checking out.

Although Root assigns premiums differently than do traditional insurers, it offers familiar coverage options. Root allows for multiple vehicles, drivers, and claims solutions.

Root insurance is currently available in Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia with more geographic coverage soon to come.

Metromile car insurance review and information

Metromile combines standard car insurance and usage-based insurance. Metromile's auto insurance premiums are broken down as such:

  1. Your base profile, determined by traditional data such as your vehicle type, age, driving history, and credit score.
  2. How many miles you drove the previous month, multiplied by a cost-per-mile fee.

If your base profile is $30 and you drove 400 miles at 6 cents per mile, your monthly premium would be $54. While Metromile uses telematics technology to track miles driven, it functions as pay-per-mile car insurance.

Your mileage is tracked through a device called Metromile Pulse. This device plugs into your vehicle’s OBD-II port. Metromile's pay-per-mile system considers only mileage, so driving behavior is not accounted for in your rates.

Because monthly mileage is utilized to determine premiums, Metromile is a great option for low-mileage car insurance consumers. Although driving history is factored into the base rate, Metromile doesn't specifically cater to safe drivers.

Metromile is available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

Is usage-based insurance right for you?

In theory, paying only for the miles you drive based on how you drive is a great idea. In practice, there could be some hiccups. The only way to answer this question is to test it out yourself. Root allows you to complete the test drive period and get an estimate before committing. If Metromile is available in your state, you can get a quote by providing a rough estimate of your monthly mileage.

If you’re interested in learning more about telematics, usage-based insurance, or car insurance in general, see our additional articles below.

Compare car insurance rates today!

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