Skip to content
Home » Covid Sparks Spike In Usage-Based Car Insurance

Covid Sparks Spike In Usage-Based Car Insurance

Among the myriad changes triggered by the Covid-19 pandemic is the sharp spike in a form of auto insurance that can greatly reduce premiums, especially for the millions of drivers who no longer commute since they’re now working from home. 

It’s called usage-based-insurance, or UBI. Rather than set premiums, rates are based on driving habits and mileage. The safer the habits and lower the miles driven, the higher the possible discount. A study released last month by market research company Allied Market Research predicts the global market for UBI will reach $149.22 billion by 2027. According to the study, UBI already accounted for nearly two-fifths of the North American insurance market in 2019 and has escalated since the onset of the Covid-19 pandemic.

According to the Allied Marketing study, more than three-fifths of UBI policies held in 2019 depending on vehicle black boxes, but the company predicted smartphone usage will increase in the next seven years accounting for a 30.3% compound annual growth rate during the period. 

Prodigy’s Michia Rohrssen says online insurance sales have skyrocketed by 300% this year citing “during Covid, the amount of users buying cars online is incredible,” pointing out that generally Millennials have been leaning towards usage-based insurance. 

The choice, he says, becomes more obvious when shopping for insurance online on the Prodigy platform, explaining, “on the screen you can see 10 different quotes from top providers. As you look at the options, $150 a month, $120 a month, then you see UBI, $67 month. I don’t know it’s enough to make someone go with UBI because it’s cheaper, but it makes them consider the option and I think that’s the most important factor.”

Original Article

%d bloggers like this: