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Study shows drivers improve their habits when knowingly monitored by insurers

Hands on a Steering Wheel

Having a backseat driver cautioning your every turn, stop and traffic maneuver may be annoying, but research from Purdue’s Krannert School of Management and the University of British Columbia (UBC) shows that people’s driving techniques may actually improve when they know their insurance company is watching

“With usage-based insurance (UBI), a telematic device is installed in your car that records such things as how far you drive every day, where you drive, and how quickly you accelerate, brake or make turns,” explains Ting Zhu, an associate professor marketing. “Insurance companies use this information to adapt their rates accordingly, offering lower premiums to better drivers. Our research examines if and how people change their driving behavior after adopting this new form of insurance.”

The study, titled “Sensor Data, Privacy, and Behavioural Tracking: Does Usage-Based Auto Insurance Benefit Drivers?”, was co-authored by Zhu, professor Charles Weinberg at the University of British Columbia (UBC) Sauder School of Business, and UBC Sauder PhD candidate Miremad Soleymanian.

Using data from a U.S. auto insurance company, the researchers observed UBI subscribers’ driving behavior over time and found that those who use telematics reduce the number of hard brakes and improve their overall UBI score.

“Women in particular seem more likely to respond to the knowledge that their insurance rates will increase as a result of their bad habits and change their behavior accordingly,” Zhu says. “Young drivers also benefited from the device.”

Given the estimate that 142 million drivers worldwide will use UBI by 2023, the researchers pose an interesting question: Should people trade their privacy for an insurance discount?

“Drivers with privacy concerns won’t be likely to install a telematic device,” Zhu says, “but the tradeoff for those who do includes the benefits of being encouraged to drive more safely, which ultimately results in fewer accidents.”

An abstract and PDF download of “Sensor Data, Privacy, and Behavioural Tracking: Does Usage-Based Auto Insurance Benefit Drivers?” is available at

Note: Portions of this story were excerpted from the Vancouver Courier article "When Big Brother shouts 'Shotgun'! our roads may be safer" at