The program uses a UBI device to track the save driving behaviors of specific drivers so that they can save money on their coverage. It measures the way in which a car moves so that the insurer can more accurately determine the risk associated with the driver and calculate a more precise rate for protection.
DriveFactor was established in 2010 under its original name, Crimson Informatics. It has made significant efforts to remain at the forefront of insurance technology and uses this new method to calculate premiums in the following way:
• A small device is installed into the vehicle’s onboard diagnostic port (OPD).
• The vehicle and the device work together to transmit data information to the insurer which is then stored in servers.
• There, the data is organized and managed in a database so that it can be analyzed by the insurer.
• This is run through the company’s calculation, converting it into a score.
Raw data from the accelerometer on the car is therefore converted into a way to understand a driver’s habits.
From the accelerometer, which states when a vehicle is moving forward or backward, left or right, or is going up or down an incline, the analysis can determine how hard a driver brakes, how often he or she makes turns, how fast he or she goes, and how frequently the car is driven on hills. The usage based insurance system is then able to interpret those features into a score that will tell the insurance company how safely a specific policyholder drives.
According to DriveFactor, this new usage based insurance program can provide rewards to good drivers in the form of savings of as much as 50 percent off the premiums being paid for coverage. This benefits both the driver and the insurer and is therefore being adopted by a growing number of insurance companies so that they can rapidly and accurately assess driver abilities and habits so that they can receive the appropriate discounts.
