What is a common perception of usage-based insurance among consumers?

Usage-based insurance is often perceived by consumers as a way to achieve greater personalization of premiums. This perception arises from the fundamental nature of usage-based insurance models, which rely on individual driving behaviors and patterns to determine premium rates. By monitoring factors such as mileage, speed, braking patterns, and overall driving habits, insurers can tailor premiums based on the actual risk posed by each driver rather than relying solely on demographic factors or broad statistics.

This personalization can lead to potential savings for safe drivers, thereby appealing to consumers who appreciate the pay-as-you-drive model. Such an approach aligns insurance costs more closely with individual risk levels, which many consumers find attractive.

The other options do not accurately reflect consumer perceptions. For instance, many believe that usage-based insurance can lead to lower premiums for safe drivers, contradicting the idea that it is always more expensive. It certainly does not eliminate the need for insurance; rather, it transforms how premiums are calculated. Additionally, usage-based insurance is not exclusively aimed at high-risk drivers, as it is available to a broader audience who can benefit from personalized rates based on their driving behavior.