Half of consumers say they would sign up for a usage-based insurance (UBI) program for a 10 percent discount, according to new research from LexisNexis Risk Solutions, which helps insurance companies and other clients predict and manage risk.
The study also found that 36 percent of consumers would change carriers to sign up for a UBI program if they could get a 10 percent rate cut.
Telematics programs use technology to track customers' driving habits and give discounts for safe driving and low mileage. Awareness of the programs, such as Progressive's Snapshot or Allstate's Drivewise, has tripled in the last three years, with one in every three consumers now aware of them, LexisNexis said.
Other findings from the study:
- Sixty-one percent of consumers are more likely to accept usage-based insurance if insurers offer a three-month trial period.
- Seventy-two percent of drivers are more likely to accept the program if an insurer offers an automatic discount of 10 percent for the first six months.
- One-third of consumers finds the idea appealing and is likely to use a smartphone to collect and transmit driving habits and mileage data.
Independent research firm Lynx Research Consulting conducted the survey for LexisNexis. It polled 2,072 U.S. residents representing a sample of insured drivers ages 21 to 74.