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Auto insurance existed for about 100 years before the first usage-based insurance (UBI) programs came to market. Early UBI programs used aftermarket hardware, quickly moving from professionally installed to self-install devices plugged into a vehicle’s OBD-II port. Millions of OBD-II devices were used before smartphone-based technology became the primary technology solution. Once less costly for insurers and more accessible for the consumers, insurance carriers began investing more promotional resources into their UBI programs.
However, UBI still isn’t viewed as a default component to be used in the pricing of car insurance. Why?
Even with its inherent cost