Usage-based car insurance for multiple drivers
Learn how usage-based car insurance works with multiple drivers on one policy and how their combined driving habits may affect costs and potential savings.
Overview: When multiple drivers share a usage-based car insurance policy, the driving habits of each person are combined and contribute to the overall cost. When everyone on the policy maintains safer driving habits, it can help maximize potential savings and lower costs, while riskier behavior by any individual may increase the overall rates.
What is usage-based car insurance?
Usage-based insurance (UBI) is a type of auto insurance where your premium is determined by how you actually drive. Instead of only using factors like age, vehicle or driving history, this insurance monitors things like how many miles you drive, your speed and how smoothly you brake and accelerate. This information is collected through a telematics device installed in your car or a mobile app. If you drive safely or even drive less, this may lead to discounts, since better driving habits can lessen your risk in the eyes of the insurer.
But, if you share your car with others, you’ve probably wondered what happens when more than one person, such as your spouse, teen or another family member, is on the same usage-based auto insurance policy. How is that information tracked?
How does usage-based car insurance track multiple drivers on one policy?
Usage-based car insurance programs use technology to track things like speed, braking and mileage. Here are some of the ways driving activity can be recorded and how it works when multiple drivers use the same vehicle:
- Plug-in devices — these small gadgets plug into your car and record how the vehicle is driven no matter who’s driving. So, if you and your teen, for example, both use the car, the device combines your habits into one data set.
- Smartphone apps — these apps work to identify who’s driving based on whose phone is in the car and how it moves. Sometimes, if you and another enrolled driver are both in the car, it might guess wrong about who’s actually behind the wheel, but it generally assigns the trip to the driver whose phone is detected.
Knowing how your usage-based car insurance program tracks driving data is important, especially if you share a vehicle, as the results may impact the potential savings on the policy.
Combined driving habits may affect costs and discounts
When multiple drivers are on one policy and share a car, everyone’s driving behavior matters. A shared car is a shared responsibility, and everyone plays a part in how it’s driven. The car’s data reflects the habits of everyone who drives it. So, if one person drives safely but someone else tends to speed or brake hard, that information all gets combined in the program’s results.
That’s why it pays to talk as a household about your shared goals, including safe driving, saving money and avoiding risky habits. When everyone’s on the same page about avoiding driving distractions and driving safer, the better your chances for potential savings.
Benefits of usage-based car insurance for teen drivers
Adding a teen driver is a big step, but usage-based car insurance programs can be beneficial to teens in a few ways:
- Could lead to safer driving habits — these programs provide real data on driving details, which means teens can use actual examples from their trips to better understand how to implement safe driving habits into their everyday routines behind the wheel.
- Could help decrease overall costs and increase potential savings — if your teen (and everyone else using the car) drives safely, it may lead to discounts. Consistently good habits on the road help your chances, while risky driving can take those potential savings opportunities away.
- Could help parents stay updated — this technology is a great way to help keep parents informed on their teen’s safety. It’s less about catching mistakes and more about supporting their safe driving.
Parents of first-time teen drivers may also want to consider another usage-based car insurance program: pay-per-mile. This option may be a practical choice for teens who may only be on the road occasionally, such as running family errands or commuting to and from school. This type of policy charges based on the actual number of miles driven and may offer additional savings while still providing essential coverage.
Have questions about how usage-based car insurance works with more than one driver on one policy or how it may help you save money? State Farm® has local agents who can help answer your questions.
The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
This is only a general description of coverages and is not a statement of contract. Details of coverage or limits vary in some states. All coverages are subject to the terms, provisions, exclusions and conditions in the policy itself, and in endorsements.
State Farm Mutual Automobile Insurance Company
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Bloomington, IL
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Richardson, TX
