These days, understanding the costs associated with automotive insurance is like trying to solve a puzzle. Most drivers know that different variables determine their premium prices but don't know the factors that outweigh each other when they want to save money or lower costs. Understandably, the inadequate transparency in the process leaves much to be desired, making customers feel helpless and frustrated in reducing their expenses despite practising safe driving.

On the opposite side of the spectrum, insurance carriers also struggle with this problem as they face rising losses and lagging revenues. To offer a better customer experience and save their clients more money, many insurance companies have begun to turn to usage-based insurance (UBI) models to help them accurately predict costs. UBI models can reduce the dependence on generic information, such as gender or age, replacing them with real-world data. Through tools like onboard diagnostics that are equipped to monitor potentially dangerous driving behaviour, they can calculate risks accurately.

Behaviour-based insurance

UBI insurance is helpful because it can track the vehicle's performance and therefore measure risk with a reasonable level of accuracy. When paired with behaviour-based insurance, carriers and consumers can measure automobile usage and, as its name implies, the driver's behaviour. As a result, they can analyse risk more precisely than ever before, changing the calculus in favour of insurers and their drivers.

A more intelligent way forward

With behaviour-based insurance, providers and consumers can understand drivers' actual road behaviour much better when supported by modern technologies like artificial intelligence and machine learning. This is especially true if coupled with the smartphone, arguably the most popular onboard device in the world. So while they might have led to the prevalence of distracted driving, mobile technology is also a remedy.

Mobile device features like sensors are now utilised to prevent and identify device use while on the road. Other onboard features like lane-keeping assistance and automatic braking also make driving much safer than it otherwise would have been. Even developers and wireless carriers have begun to push solutions and services to thwart distracted driving. Some examples include locking the mobile device whenever the car starts moving or reaches a specific speed. These tools and all the information you can get can potentially lead to massive savings for drivers and their respective insurers. 


Through real-world data across millions of different devices, insurance companies are now better equipped to take stock of the risks of their prospective and existing clients. As a result, drivers can stay on top of their driving habits, not only for keeping their insurance premiums at a minimum, but more importantly, to ensure their safety and that of everyone driving on the same road.

As behaviour-based insurance continues to become more accurate and grow smarter by collecting and analysing data, there’s no doubt that the technologies supporting it will change and evolve to accommodate insurers and their customers better. And because of it, automobile insurance will increasingly become fairer, more affordable, and safer for everyone.