NAIC’s new DriveCheck tool helps drivers decide if usage-based insurance is right for them

The National Association of Insurance Commissioners (NAIC) has come out with a new DriveCheck assessment to help consumers determine if usage-based insurance is right for them.

Since 1983, the percentage of people with a driver’s license has steadily decreased among 16- to 44-year-olds. At the same time, reliance on public transportation and ridesharing services are on the rise.

Given these trends, new products such as usage-based insurance (UBI) are gaining traction. The new DriveCheck assessment NAIC helps consumers determine if UBI may fit their driving habits.

“New insurance products may be an option for some drivers whose habits have shifted. That’s why the NAIC created DriveCheck,” NAIC President and Wisconsin Insurance Commissioner Ted Nickel said. “The simple online assessment helps consumers understand how UBI works and determine if it’s a good fit for their driving behaviors.”

Carrying no driver’s license has been prominent among millennials and members of Generation Z for years. Once the ultimate mark of adulthood, only 69 percent of 19-year-olds had a driver’s license in 2014, compared with almost 90 percent in 1983.

Drivers cite cost of insurance and availability of alternate options — including ridesharing services — as key factors when deciding to forgo driving. In fact, a recent survey revealed that 10 percent of Americans who trade in cars are not purchasing new ones and instead opt to use ridesharing services.

Ridesharing is especially common in the business community, as rides with Uber and Lyft rose to 46 percent of all ground transportation during business trips, overtaking both taxis and rental cars in popularity. The ridesharing industry expects 13 percent growth in 2017.

As mobility preferences shift, consumers should re-evaluate their auto insurance needs and options, said NAIC. One consideration is usage-based insurance. UBI examines driving habits (miles driven, speed, time of day and other factors) to determine insurance costs. Less than half of Americans are aware of UBI as an option and only about 6 percent are using the product. Yet, when offered UBI as an option, half of American drivers make the switch.

The DriveCheck tool takes consumers through a few quick questions about driving habits while providing more information about how UBI works. At the end, users receive an assessment of the likelihood they will benefit from UBI. If they fit the profile, consumers then should discuss usage-based insurance with their insurance agent.