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Usage-Based insurance (UBI) uses telematics to track real-world driving behavior. It offers major benefits to both consumers and insurers.

For drivers, it means your insurance costs are no longer dictated by the behavior of people with whom you share broad demographic attributes but little else. The assessed risk (and insurance rates) will be based entirely on how, where, and when you drive. The safer one drives, the less one pays.

For insurers, UBI allows for much more accuracy (and potentially, profitability) in issuing policies and setting premiums. However, the real benefit is in terms of the underwritten liabilities that the insurers can write-down based on safer drivers.