Which factor is primarily assessed in usage-based insurance?

Usage-based insurance primarily assesses the actual driving behavior of the insured. This type of insurance uses telematics technology to collect data on how a driver operates their vehicle, focusing on factors such as speed, acceleration, braking patterns, and even time of day when driving occurs. By analyzing this information, insurers can adjust premiums based on the risk profile displayed through the driver's activities, rewarding safer driving with lower rates.

This approach allows for a more personalized insurance model, as premiums are directly linked to individual driving habits rather than general demographics or historical data. Consequently, it encourages drivers to adopt safer practices on the road, potentially improving overall road safety and reducing the incidence of accidents.