Today, privately-owned cars are left stationary for most of the time, dwelling either at home or the office. With the pandemic leading many to work from home almost exclusively, some cars might now be stationary for days on end. Meanwhile, annual insurance premiums mean drivers are often overpaying in relation to the mileage they drive.
Usage-based insurance (UBI) is seen as a way to get around the problem. UBI relies on telematics systems that draw data from the vehicle to show how and where it is being driven. This could flag instances of hard braking and acceleration or changes in location and weather, all of which can influence perceived risk. In future, more novel UBI solutions could even adjust their premiums based on an uptick in local crime, or if a driver joins a statistically more dangerous road. It could also go the other way, making premiums fall for safer drivers in safer areas.
UBI will benefit not just drivers but also insurers given it can more accurately assess the level of risk they are taking on. “Insurers that employ advanced telematics systems and
