The interest in use-based car insurance -- where consumers pay insurance rates based on their driving habits -- is growing, with 36 percent of consumers saying they would change carriers for a 10 percent discount on their car insurance rates, according to the 2013 Telematic Survey by Lynx Research Consulting for LexisNexis.
Usage-based auto insurance uses a telematics program to determine the time, frequency and manner in which the car is driven, collecting the information and providing it to the insurance company to determine if a driver is eligible for discounts on insurance premiums. One-third of respondents said the idea was appealing and are likely to allow a personal smartphone to be used to collect and transmit the necessary data.
The study found that 61 percent of drivers are more likely to accept telematics if insurers offer a three-month trial period, while 72 percent are more likely to accept a program if the car insurance provider offers an automatic 10 percent discount during the first six months.
How about you? Would you accept telematics?
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.