“Your driving record has only a handful of data points,” says Eli Lehrer, president of the R Street Institute, a nonprofit think tank. By using UBI, insurers “can get a fuller picture of a driver.”

For most people, the move to usage-based insurance is a good thing, because it means insurers will be able to better identify people who are unlikely to file claims and can lower those drivers’ rates accordingly.

But what about the bad drivers?  Currently, insurers that use UBI programs say they won’t raise rates on less-than-perfect drivers whose behavior is monitored. “That initially encourages people to try it out,” Lehrer says, but companies may switch tactics once UBI becomes more widespread. After all, Lehrer says, companies can afford to lower rates for good drivers only if they ultimately raise premiums for not-so-good drivers.

Some drivers also are concerned about privacy issues, as UBI devices track their driving behavior and locations. Lehrer thinks those worries are overblown. “It doesn’t strike me as hugely invasive,” he says. “If law enforcement really wants to track you right now, they already can.”

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