Usage based car insurance is marketed as fair and data-driven. In reality, it’s just a polished version of old-school discrimination. The idea sounds great—pay for how you drive instead of being lumped into generic risk pools. But once you break it down, the problems start stacking up.
I’ve worked with insurance data models; they don’t just track mileage and braking. They analyze when and where you drive, how often you drive at night, and even the neighbourhoods you pass through.
The insurance companies claim this is about risk assessment, but it’s about targeting specific demographics. Someone working late shifts or living in a high-crime area gets flagged as a risk, even if they have a spotless driving record.
Usage-Based Car Insurance
A case that stands out to me involved a rideshare driver who enrolled in UBI and was expecting lower premiums. Instead, his rates skyrocketed. The insurer flagged his frequent nighttime driving and high mileage as risky, even though he had zero accidents. Another driver—same age, exact vehicle—paid less simply because she worked a 9-to-5 job. That’s not about driving skill; that’s about profiling.
There’s also the issue of data ownership. These companies collect detailed driving habits but give almost no transparency in return. Most people have no idea what data is being used against them. When you get a rate hike, they won’t tell you exactly why. You have to accept it.
It’s not just about fairness—it’s about control. The more data these companies collect, the more they dictate behaviour. Avoid driving at certain times, take specific routes, or pay the price. The appeal of “fair pricing” is just a way to sell constant surveillance.
People need to ask themselves: Do you really want your insurance company to decide what’s acceptable driving based on algorithms you’ll never see?
