Good drivers pay less: A study of usage-based vehicle insurance models

Yiyang Bian; Chen Yang; J. Leon Zhao; Liang Liang

doi:10.1016/j.tra.2017.10.018

Author(s)

Yiyang Bian
Chen Yang
J. Leon Zhao
Liang Liang

Related Research Unit(s)

Detail(s)

Original language	English
Pages (from-to)	20-34
Journal / Publication	Transportation Research Part A: Policy and Practice
Volume	107
Online published	15 Nov 2017
Publication status	Published - Jan 2018

Link(s)

DOI	DOI https://doi.org/10.1016/j.tra.2017.10.018 Final Published version
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Link to Scopus	https://www.scopus.com/record/display.uri?eid=2-s2.0-85034069224&origin=recordpage
Permanent Link	https://scholars.cityu.edu.hk/en/publications/publication(1244945e-4699-4121-b336-7dde65de975b).html

Abstract

Usage-based insurance (UBI) has been attracting more and more attention; however, two open research questions are how behavioral data of drivers affects driving risk and how driver behavior should affect UBI pricing schemas. This paper proposes a driver risk classification model to evaluate the risk level of drivers based on in-car sensor data. A Behavior-centric Vehicle Insurance Pricing model (BVIP) and a vehicle premium calculation prototype are developed in this paper. Based on empirical data, our research results show that BVIP achieves better accuracy in terms of risk-level classification and the prototype achieves good performance in terms of effectiveness and usability.