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Which Usage-Based Insurance Program Is Right For Your Clients?

JUN. 16, 2020
  • Consumer interest in usage-based car insurance is on the rise
  • Policyholders that drive less or have safe driving habits can save on car insurance
  • Nationwide agents can help their clients select the right policy

Your customers might be surprised to find out they can save by switching to usage-based insurance (UBI) and the current environment could accelerate their interest in these products. The “one-policy-fits-all” approach to auto insurance is coming to an end as consumers look for coverage options tailored to their personal driving habits. Agents who can help their clients choose the right usage-based insurance option will have an advantage.

Nationwide’s usage-based car insurance

There are a variety of usage-based insurance options on the market. Nationwide offers a full suite of options that can be mixed and matched within the same policy. For many, these programs offer opportunities to save.

  • SmartRide® offers a discount based on how safely policy holders drive.
  • SmartMiles® provides a rate based on how much they drive.

Conversations with clients can begin with two simple questions:

  1. How safely do you drive?
  2. How much do you drive?

Answers to these questions will likely point you in the right direction.

Nationwide SmartRide®

This car insurance policy is based on how safely customers drive.

Safe drivers cost less to insure, and those savings can be passed back to safe drivers. SmartRide tracks driving behaviors for miles driven, hard breaking and acceleration, idle time and nighttime driving for six months, giving weekly progress updates and personalized driving feedback allowing drivers to save up to 40%1. If your clients are like John or Pat in the scenarios below, recommend SmartRide.

Examples of SmartRide drivers

  1. SmartRide driver John
    • John prides himself on safe driving habits. He’s mostly behind the wheel to commute to and from the office, trips to the gym, or when he’s transporting his most precious cargo: taking his children to soccer practice.
  2. SmartRide driver Pat
    • Pat is a new teenage driver. Her parents have done their best to instill safe driving practices and encourage this behavior every time she’s behind the wheel. SmartRide’s real-time coaching and feedback was an appealing feature to reinforce driving safety measures by flagging things like hard stops or when she accelerates too fast. Learning how to become a safer driver, Pat was also able to earn a safe driving discount through the SmartRide program.

Nationwide SmartMiles®

This car insurance policy is based on how much customers drive.

If your clients are lower-mileage drivers, they could benefit from SmartMiles. Customers are saving an average of more than 25% on their auto insurance, compared to traditional Nationwide auto policies2. If your clients are like Sam or Mel in the scenarios below, recommend SmartMiles.

Examples of SmartMiles drivers

  1. SmartMiles driver Sam
    • Sam is retired and lives near public transit, rarely using her car. Even with monthly visits to spend time with family who lives a few hours away, SmartMiles’ road trip exception caps daily mileage at 250 miles, which reduces the impact on Sam’s miles driven each month.
  2. SmartMiles driver Mel
    • Living near his workplace and walking to work most days, Mel primarily drives for short trips to the grocery store, visiting friends and family nearby, and weekly meet ups with his trivia group.

For some, traditional insurance will remain the right option, but for safe and lower-mileage drivers there may be an opportunity to save. Usage-based insurance programs and the customized rates they can provide are likely to become the insurance choice for drivers in the years ahead. Read more on our agent’s usage-based insurance guide.

Sources

  • 1

    SmartRide program availability varies; program criteria differ in California. Stated discounts are approximations. Discounts do not apply to all coverage elements; actual savings vary by state, coverage selections, rating factors and policy changes. the final discount is calculated according to driving behavior and could be zero. The final discount applies at the next policy renewal and is subject to change based on actuarial support at subsequent renewals or with changes in drivers or vehicles on the policy. Monitoring is for one policy term if selected for new business. If selected at renewal, monitoring is no more than two policy terms.

  • 2

    SmartMiles savings based on national data through February 2020. Program availability varies. SmartMiles includes a base premium plus a variable premium based on the coverages in force and the days and miles driven.