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Usage-Based Insurance: Could it Make the Highway Safer?

young-driversTruckers know it as well as anyone: young drivers are often aggressive, easily distracted, and too frequently pose a threat to commercial vehicle operators. But now there’s some good news: a new strategy, called usage-based insurance, could make highways safer for everyone.

Usage-based insurance (UBI) is becoming a more and more popular concept. Essentially, it involves using wireless technology to track a driver’s behavior — from how fast they accelerate to how rapid they brake and corner — to determine how much they should pay for car insurance.

Now, a British automotive insurance company has released a new report which says that usage-based insurance is preventing traffic accidents among young people by encouraging them to driver safer.

The report comes from United Kingdom-based insurance provider Ingenie, which says that it launched its UBI program to help improve highway safety. According to the Ingenie report, 20% of serious road accidents involve drivers who are under age 25, even though this group only makes up about 8% of Britain’s drivers. Ingenie says that five 15 to 24-year-olds are killed every single week on Britain’s roadways, often because they’re distracted or take unnecessary risks.

Ingenie says its UBI program changes everything. “With feedback and incentives, it is possible to motivate even reckless drivers” to drive safer, the report says. The results are clear, Ingenie insists: after just one year on the company’s UBI program, young drivers typically cut their crash risk in half.

“Over 90% engage with automotive telematics feedback about their performance and those who engage with it most frequently are the least likely to crash,” the report says. “Despite natural drivers’ natural propensity for distraction and greater risk-taking, with the right feedback and incentives, it is possible to motivate even reckless drivers to change their behavior.”

Ingenie says it has collected more than 200 million miles of driving data since 2011 and is actively using that information to show young people how they can become safer and more effective drivers. Overall, the company has seen a 21% reduction in dangerous driving accidents among its customers between 2013-2014.

Those young drivers who use the UBI plan are seeing results, with 91% earning a “no claims bonus” at the end of their first telematics policy year.

Here’s hoping UBI continues to make the road safer for trucks and passenger vehicles.