Professional Insurance Programs

Usage Based Rating for Auto Insurance

If you’re a good driver who likes the idea of getting discounts on car insurance based on low mileage and perhaps a few measurements of your driving skills, you might want to consider usage-based insurance or pay-per-mile insurance. A growing number of car insurance companies offer programs that use technology to track your driving and then base premiums partly on the collected information.

Usage-based insurance

To find the right usage-based policy for you and get the cheapest car insurance, you’ll want to compare several programs. Each company’s program works differently, and often the same program’s details vary by state. Typically the usage-based discount applies to bodily injury and property damage liability insurance as well as collision insurance.

Most of the programs involve a small “telematics” device that you plug into your car’s diagnostic port, which is located under the dashboard, usually on the driver’s side. Some programs use subscription-based car-connectivity services, such as OnStar, to track driving. Insurers are also experimenting with using mobile apps for monitoring. In all cases these devices and apps send real-time information about your driving back to the insurer. You can also check how you’re doing online or through an app.

Part of your rate is still based on traditional factors such as your age, the type of car you drive and whether you’ve had recent accidents or traffic violations. But a portion is affected by how much you drive. Some programs also base part of your rate on when you drive and how safely you drive.

To learn more about these programs or to see if your carrier offers this, please contact Professional Insurance Programs at 800-637-4676 or