Could usage-based car insurance save you money?

1. How does it work?

Most usage-based car insurance policies have you plug a small device into your car’s diagnostic port, which is usually under the dashboard.  Others use cell phone connections or apps.  All of them send information about your driving to your insurer.

2. Is it a good deal?

It could lower your premium if you drive safely and don’t drive lots of miles.

3. How about my privacy?

There are many privacy issues to consider related to these types of policies.

For more information, click here.

Teaching Suggestions

1. Ask students to find out if their car insurer offers usage-based insurance.
2. Under what circumstance will you consider purchasing usage-based car insurance?

Discussion Questions

• What might be the purpose of using global positioning systems and other technology in determining the car insurance premiums?
• Will younger drivers embrace the monitoring devices, especially when car chips allow parents to monitor the speed and braking habits of young drivers?