The traditional auto insurance model is somewhat of a farce because safe drivers are essentially subsidizing the reckless. For decades, the 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 of your Toyota Tacoma. Now, though, that archaic paradigm is showing its cracks and the goal posts are moving. Telematics technology has introduced a new and different framework, shifting the industry toward a personalized risk assessment model. At its core, pay-as-you-go car insurance promises a fairer proposition: you pay for exactly what you use and how you operate the vehicle. However, it’s not always as straightforward.
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