In our fast-paced world, technology is always moving at the speed of light. This, of course, is true for the automotive industry as well. 

But it hasn’t been true of the auto insurance industry for a hundred years. Until recently. 

With the introduction of usage-based insurance (UBI), drivers have had the option of lowering their rates simply by driving safer. But this was always complicated in practice because drivers had to install a device in their vehicle or download an app with tracking enabled. And there may have been a lengthy waiting period as well before seeing a change in their rate.

Now, with the developments in connected vehicle technology, the initial usage-based insurance (UBI) monitoring period could be eliminated completely. This means that drivers are instantly able to have a driving behavior discount or surcharge applied during their quote. Essentially, it removes the uncertainty around what these amounts might be when policyholders no longer need to commit to a three to six-month monitoring period.

Usage-based car insurance monitors driving behaviors (such as speeding and hard braking) to better assess risk and provide a more personalized price. In other words, it is insurance with premiums that incorporate how people actually drive, powered by telematics technology.

Original equipment manufacturers (OEMs)... think of them like major auto brands... are continually looking for new ways to monetize connected car data, and some have turned to the insurance industry. A connected car is essentially one that has the ability to wirelessly access the internet, and most vehicles rolling off the assembly lines today come equipped with the necessary hardware as standard.

Over the last few years, OEMs have been expanding the pool of car owners that they have driving data on and allowing insurance companies like Novo to tap into it when an individual with an eligible vehicle is getting a quote. However, there also needs to be a sufficient amount of driving history found for that individual in order for the insurer to accurately assess and rate on. The insurance industry is still very much in the early stages of incorporating this data during the quote, but the UBI leaders will keep pushing to shorten the time needed to collect and apply driving behavior to pricing.

Not only is it a win for insurers and OEMs, but for consumers too because by enrolling in a usage-based auto insurance program, they can lower the costs for coverage. That’s actually great news for everyone... because the more people that sign up for UBI with the incentive to drive safely, the safer the roads are for all.

Beyond driving behavior, insurers may look to leverage additional OEM data to increase pricing sophistication relating to the specific vehicle being insured. During the quoting process, carriers can use the VIN to identify the vehicle’s installed options (such as those found on the manufacturer’s build sheet) to incorporate into the premium calculation. Certain safety features like automatic emergency braking could be worthy of an additional discount and one day, insurers may even be able to reward policyholders for time spent using their vehicle’s hands-free driving system due to the reduced risk of an accident vs. a human driver.

The Novo Safety Program is an innovative new usage-based auto insurance (UBI) product utilizing connected car data that is now available in the state of Arizona, and rolling out across the country. It differs from other insurance options out there because premiums change from month to month — all based on driving behavior. Other companies offer static pricing... in other words, you could be locked into a bad rate, even when your driving improves. You would have to wait until renewal to get a better price... and ugh, who wants to wait so long? With Novo, your rate will even be based on your actual driving behavior right from the start if we are able to access historical data from your connected car.

Novo’s Safety Score is our way of measuring your driving performance and calculating your monthly cost of insurance. It factors in acceleration, braking, and speeding... in addition to how many miles you drive. Events that we consider risky will lower your score while trips without risky behaviors will increase the score.

Unlike other insurance carriers that offer UBI options, Novo is also simplifying everything by making it easier than ever for drivers with no need to install a plug-in device or download an app tracking your every move. All these driving stats are obtained straight from your connected vehicle — putting you back in control over your auto insurance pricing.

The Novo Safety Program is currently available to all Chrysler, Dodge, Jeep, and Ram connected vehicle owners, with additional OEMs coming soon. The majority of 2022 and newer vehicles from Stellantis, which owns these brands, are eligible, though some may have gained connected capabilities before or after that model year.

A full list of eligible vehicles for the Novo Safety Program can be found here, and at least one of these vehicles must be included in your policy. As long as this requirement is met, you may also include other vehicles not on this list, and our quoting experience will confirm based on the VINs that the combination of cars is compatible.

Drivers can give consent for Novo to access their driving data straight from their vehicle’s infotainment system. From there, Novo will be able to collect your driving data to calculate your monthly premiums.

Novo believes that obtaining data from a connected vehicle is a superior UBI data collection method. It removes the frictions of mailing and installing an OBD plug-in device and also increases the accuracy of data collected over a mobile phone... which is susceptible to errors like scoring you taking a trip as a driver when you were actually just a passenger.

Take a ride with a risky driver with your smartphone-based UBI from another insurance company and that could impact your own driving score, raising your rates. We think your price should be about the way you drive... not your friend who likes to speed. This is how connected car insurance keeps your score — and rate — protected.

After you purchase a policy, the premium for the first 2 months will be locked in. If you have at least 30 days of historical driving data that we are able to access, your enrollment Safety Score for these 2 months will be based on that driving behavior. Otherwise, you will be provided with a default enrollment score with a discounted rate.  

After 5 eligible trips, Novo will utilize your driving behavior to begin calculating your initial Safety Score as a policyholder on a scale of 1 to 100. This Safety Score will be used to determine your premiums after the first 2 months. The higher your score, the lower your premium will be. However, a lower score can result in increased premiums.

Month 3 will be the first month that is impacted by changes in your Safety Score based on driving behavior collected during month 1 of your policy. Then month 4’s premium is impacted by the Safety Score from month 2, and so on. There is always a 2-month gap between the Safety Score and the premium associated with that score so that drivers will have at least 30 days’ notice of any change in premium. 

Novo believes in making our roads safer, one ride at a time... all while offering drivers the chance to pay premiums that more accurately reflect the level of risk they represent.  

Novo’s app was designed to provide you with all the tools to help make you a safer driver, as well as show you how we are calculating your dynamic, monthly pricing. 

By becoming safer on the road, you reduce the risk of insurance losses, allowing us to reflect that in a lower monthly bill for you. Download the Novo app and you can view your Safety Score... along with green/yellow/red performance indicators for acceleration, braking, and speeding.  

The app will also provide an estimate of your next month’s premium if you maintain the same driving habits, allowing you to adjust them in real-time with the help of our coaching tips.

Find out more about how Novo can lower your premiums while offering you the best usage based car insurance:   

• Introducing Novo    

• Auto Insurance: Transformation or Disruption    

• Current State of Auto Insurance 

The more informed you are, the more likely you will select the right insurance policies to fit your needs. Check out more posts on insurance: 

• Comprehensive Insurance: What is Covered and Why Consider Adding this Protection 

• Does Car Insurance Cover Vandalism?