It is becoming familiar to read about the “Internet of Things” (IoT) and how this will increasingly impact our lives.  If you think the impact will occur sometime in the future, think again.  Twenty percent of Americans participated in a usage-based auto insurance (UBI) program, according to a recent Nielsen survey.   Usage-based insurance involves using IoT devices to monitor and assess a customer’s driving activity — i.e. how likely it is that an insurance company will have to pay out a policy to a client. With this extra data, low-risk customers are rewarded for their good driving habits with lower insurance premiums, whereas high-risk customers are sometimes charged higher premiums.

My son was offered one when he insured his auto through Progressive Insurance and he took it.  Among other thing it measured his acceleration rates, speed, and braking patterns.  He said having it in the car made him more aware of his driving habits and if that made him a safer driver, all the better.  While not mandatory today, UBI auto insurance coverage will become the norm over time so that your future auto insurance rate will be primarily driven by your driver rating, as well as your neighbors’ driver ratings and the ratings of the drivers who frequent your commuting routes.

For today however, if you’re a safe driver or wish to become safer, it may be worth your time to look into a policy of this type.  Your safe driving could translate into real savings.

Other highlights from the survey:

* Between 2013 and 2015, US adoption of auto UBI rose from 13% to 20%.
* 27% of Americans say their auto insurance company does not offer UBI policies.
* 41% of American consumers still do not know if their auto insurer offers UBI policies. This was slightly up from 40% in 2013.