Acceptance Factors of Car Insurance Innovations: The Case of Usage-Based Insurance

Usage-Based Insurance (UBI) is an application of Intelligent Transportation Systems (ITS) in the context of car insurance. UBI refers to insurance models in which insurers collect driving data using a telematics device. Based on the collected information, insurers can offer individual discounts depending on driving behaviour and provide feedback about each trip. Although there are plenty of advertising materials about the benefits of UBI, its user acceptance and usability have not received much research attention so far. To cover this gap, we conducted two user studies: semi-structured interviews with UBI users and a qualitative analysis of 186 customer inquiries concerning a UBI program from a web forum of a German insurer. We found that UBI can benefit drivers, insurers and society. Moreover, the country driving conditions, the policy conditions, the users’ perceived driving style, the perception of UBI, and the premium reduction influence UBI acceptance. Regarding traffic safety, some of our participants were concerned that UBI may provoke dangerous driving behaviour under certain circumstances. Finally, we make recommendations for insurers derived from users’ views, such as to provide to drivers more control over the user interface and over the way driving feedback is given to them. Concerning the driving scores, the ways in which they are calculated should be more transparent.