Potential Drawbacks of Usage Based Insurance
Usage based insurance has many positive benefits. However, there is also a negative side to consider. The system only recognizes codified risk as opposed to actual risk, where certain driving behaviors can’t be recognized. For instance, a driver that is very observant of the speed limit but otherwise did not follow safe driving behaviors would not be penalized whereas a driver who speeds but drives in a safe manner other than the speeding would be penalized heavily.
Charges for young drivers, especially at night would be very high and would also discourage them for socially driving. Another drawback is the invasion of the customer’s right to privacy because the Telematic GPS tracking of vehicles is constantly watching the actions of the driver and vehicle 24 hours a day. This is a problem for policyholders that feel as if they are being watched by their insurance company unable to make any room for even the tiniest mistake in driving. Look at Arlington Auto Insurance to find out more information on auto insurance.
