For decades, the auto insurance industry has relied on proxy data – credit scores, zip codes, and marital status – to estimate risk rather than measuring the actual time behind the wheel.
Telematics technology has introduced a new and different framework, shifting the industry toward a personalized risk assessment model.
Instead of paying a flat premium designed around an industry-assumed average of 12,000 to 15,000 miles per year, policyholders are charged a hybrid rate. This pricing model divides the monthly premium into two calculated components: a nominal daily base rate and a variable per-mile fee.
