(Source; I have been working on the next generation of auto insurance risk models for the United States) Car (really, driving) insurance is heavily regulated b

(Source; I have been working on the next generation of auto insurance risk models for the United States) Car (really, driving) insurance is heavily regulated by the government, each state has agency over what information insurers are allowed to include in their risk models, as well as actually auditing the risk models themselves. Insurance nomenclature will refer to these inputs as risk factors. You can get an overview of the rules in California from the Insurance Commissioner's office here [1], and you should be able to find similar overview for your state by googling "auto insurance risk factors <state>" Usage-based insurance (UBI) is the most recent innovation to be approved for widespread use. It's actually been around for a few years (at least 2012), this article's relevance is mostly about the incorporation of UBI data-gathering sensors directly into new vehicles. The key risk factors UBI focuses on are miles driven, and extreme acceleration/deceleration events. These factors were chosen because they can be easily measured using existing data ports on older vehicles [2], amongst other reasons. The San Francisco-based start-up Metromile [3] is one of the industry leaders. Ultimately, UBI is limited in that it focuses exclusively on factors specific to the vehicle. As many commenters have identified, "risky" driving behavior is a both a function of how you drive, and how the people around you are driving. The latter effect is much, much harder to capture, but the US Department of Transportation is already engaged in R&D to identify potential risk factors that could be used within the existing regulatory framework. With the rise in "semi-professional" drivers via on demand ride-sharing services, changes in ownership models via car sharing services, and the rise of semi-autonomous and eventually autonomous vehicles, the mechanics of automotive insurance are going to change a lot in the next few years. Happy to answer questions as best I can if people are curious. [1] http://www.insurance.ca.gov/0400-news/0200-studies-reports/0600-research-studies/auto-policy-studies/executive-summary.cfm http://www.insurance.ca.gov/0400-news/0200-studies-reports/0... [2] https://en.wikipedia.org/wiki/On-board_diagnostics https://en.wikipedia.org/wiki/On-board_diagnostics [3] https://www.metromile.com/ https://www.metromile.com/