Many Mainers drive less than they did a year ago. By many accounts, we are logging about 30% fewer miles than this time last year. Should insurance companies reduce your car insurance rates as a result? Maybe. But it won’t happen automatically.
2020 Driving Trends Affecting Car Insurance
Driving data indicates a dramatic change in behavior in Spring 2020. We all know why.
- Fewer Miles Driven (but not by everyone).
Many people are not working, or working from home. That means they’re driving less, and not as far. But essential workers and others continue to commute. Some people actually drive more than before, replacing lost income with new gigs.
- What Rush Hour?
With many offices closed, usual morning and evening congestion has almost disappeared. Those who are are driving do so at different times of day, spreading out road usage. That means less risky driving behavior such as hard stops and quick acceleration.
- Increased Speeds
With more open space on the road, average vehicle speed increased. Faster speeds and clearer roads can mean fewer but more serious crashes.
Is Your Car Insurance Priced Right?
You might deserve lower car insurance rates. But it won’t happen automatically.
Insurers probably won’t reduce rates across the board. That’s because they don’t know who’s driving less than before.
Car insurance often classifies usage into 3 categories:
- Pleasure use – used around town and for personal errants. Not driven to work.
- Commute – either short (less than 15 miles one way) or long (more than 15).
- Business – such as a traveling sales person, trade contractor or other extensive use.
You may deserve lower car insurance rates.
But it won’t happen automatically.
Imagine two Scarborough neighbors. One commutes 7 miles on I-295 into their Portland office every day, parking on the street. The other drives 2 miles to teach at a local school, parking in the school lot. In the summer, the teacher doesn’t commute at all.
They’re rated the same, even though their drives are much different. The Portland worker pays too little, while the teacher overpays.
Customized Rating – Gaining Acceptance
New technology allow insurers to customize car insurance prices as never before. It’s called Usage Based Insurance, or UBI.
Using smartphones, customers share driving data with their insurance company. The insurer compares them to other customers. Safer drivers pay less; riskier ones might pay more. Insurance companies have their own brand for UBI: Progressive Snapshot; Safeco RightTrack; Travelers Intellidrive, and so on. Each one has slightly different features.
In prior years, consumers hesitated to share this data, often citing privacy concerns. That changed in 2020. Many are looking for ways to save money in this time of economic hardship and reduced driving. Almost 50% of people who responded to a JD Power 2020 survey were willing to try Usage Based Insurance (UBI).
Are Customized Insurance Rates Right For You?
Think you’re paying too much for Maine car insurance based on your driving? Interested in learning more about Usage Based Insurance? It’s not for everyone.
A Noyes Hall & Allen Insurance agent can help you decide if it’s right for you. We offer a choice of many of Maine’s top auto insurers, with and without UBI. Call our team in South Portland at 207-799-5541. We’re independent and committed to you.