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Home > Consumers > Auto > Usage based insurance
Usage based insurance
The basics
 
What is UBI?
UBI stands for usage based insurance. UBI is a type of automobile insurance whereby the premiums are dependent upon factors such as the type of vehicle, time of use, distance driven, place and various behaviors such as sharp turns or hard braking.
 
Why are insurers using UBI programs?
Auto insurers want to align driving behaviors of an individual with premium rates for auto insurance.
 
How does UBI work?
Normally a telecommunication device (telematics) is self-installed into a special vehicle port.  The telematics device monitors a driver's behavior directly while the person drives. This telematics device measures a number of elements such as when, where and how long the vehicle is driven, sudden driving maneuvers and air bag deployment. The insurance company then assesses the data and charges insurance premiums accordingly.
 
Won’t this telecommunication device mess with my vehicle’s computer?
It is possible that a telecommunication device can interfere with your vehicle’s computer. If that happens it is important to stop using the device and see your local auto mechanic.
 
Do I have to use UBI?
No, right now UBI is not required by any company. It is completely optional. Consumers should ask their insurance agent or company about UBI.
 
Will UBI raise my rates?
Consumers should ask for information directly from the company on how UBI will impact premiums. UBI could be used to discount or add to the premium depending on how the company requests to use it in North Dakota.  
 
What companies offer a UBI program?
Several companies in North Dakota currently offer UBI programs. Consumers should ask insurance agents or contact companies direct for more information. Go to http://www.nd.gov/ndins/consumers/companyinfo/licensedregistered/ to search for companies selling auto insurance in North Dakota.
 
Besides pricing, what are the advantages to UBI programs?
UBI programs may allow consumers the ability to control their premium costs by incenting them to reduce miles driven and adopt safer driving habits.
 
Besides pricing, what are the disadvantages to UBI programs?
The practice of tracking mileage and behavior information in UBI programs has raised privacy and discrimination concerns.

North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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