How To Tell If Usage-Based Car Insurance Is Right for You

Going Over 80 Can Hurt Your Insurance Savings

Driving at 80 mph or more can count against rate-reduction rewards in usage-based insurance plans. | November 11, 2015 | iStockphoto

Plug-in devices that monitor aspects of an auto insurance customer's driving are nothing new. And it's nearly impossible to miss the commercials touting the savings that good drivers might enjoy if they try out their carrier's usage-based programs.
But what is still only whispered about are the potential downsides: surcharges for bad driving. Most auto insurers go out of their way to insist that their driver-monitoring programs exist only to reward safe drivers and that the worst outcome for trying one is that drivers don't get the advertised savings. And even then, insurers say, drivers will gain valuable feedback and be able to make positive changes in their driving.
But in spring 2015, Progressive announced that it would begin charging some members of its Snapshot program a surcharge for aggressive driving behaviors.
Dave Pratt, Progressive's usage-based insurance business leader, said Snapshot 3.0 currently exists in Missouri, Indiana, Iowa, Nebraska, Texas, Utah, Wisconsin, Illinois, Ohio and Oregon.
"Because insurance is regulated at the state level, the full rollout will take time and vary based on the Department of Insurance in each state," Pratt said.
As of now, Progressive is the only major insurance carrier moving away from the reward-only model of usage-based insurance programs, which are all still voluntary. Progressive explains that the surcharges will help them give good drivers even lower rates.
Other major insurers continue to insist that the usage-based programs will only reward good drivers and will not punish bad drivers. Justin Herndon, an Allstate spokesman, said that adding a surcharge is not something the company has considered for its smartphone-based Drivewise program. Nationwide Insurance has no plans to impose a surcharge on members who enroll in its program, said company spokeswoman Alison H. Emery.

For best results, keep this checklist in your car and makes notes at the end of each trip.
Driving Assessment Checklist:

• Times driven between the hours of 12 a.m. and 5 a.m.
• Hard braking (decreases in speed of 7 mph per second or greater)
• Quick accelerations (increases in speed of 9 mph per second or greater)
• Speeds exceeding 80 mph
• Total mileage

source: http://www.edmunds.com