Our answer to the most common questions

Frequently Asked Questions

We thought of compiling a list of the most frequently asked questions to serve as guidance to any insurance company looking at adopting a pay-as-you-go and/or pay-as-you-drive motor insurance in their product offerings.

Usage-based auto insurance programs calculate the cost of the insurance based on the actual use of one’s car. Usage-based insurance includes pay-per-mile and pay-how-you-drive programs that offer discounts based on one’s driving habits. Telematics car insurance programs monitor drivers on habits like hard braking, speed, and time of day. Usage-based discounts can be as much as 40%, depending on how the insurance program is designed.

It is usually very worth it for those who drive less or for those who work from home. This type of insurance also helps change driving habits as it makes a driver more aware of the amount of driving distance and also his driving behavior.

Usage-based auto insurance tracks driving behaviors such as speeding and harsh braking. Your car insurance premium is adjusted (often in the form of discounts) based on those driving behaviors. A typical pay-per-mile insurance policy calculates a base rate and a per-mile rate. For example, a pay-per-mile plan might have a $50 per month base rate and a $0.06 per-mile rate. So if you drove 500 miles in one month, your premium would be $80 ($50 monthly base rate and 500 miles x $0.06 = $80).

Although smartphone-only usage-based insurance can be cheaper and easier to roll-out due to fewer logistical challenges, insurance companies who adopt such technology often complain due to incomplete or inaccurate data. Furthermore, drivers often complain that since the app is always running in the background, their smartphone battery drains rather quickly not to mention that at times their phones completely turn off.

If a driver has a short commute, the risk is obviously much less than a driver who drives a longer commute. Likewise, If someone takes the bus to work each day and only use his car on the weekends, then he should have a lower risk of getting into an accident with his car.

Typically the data that can be collected is the following:


  • Speed
  • Acceleration
  • Hard braking
  • Hard cornering
  • Distance driven
  • Time of Day/ Night-time driving
  • Phone use while driving
  • Zones in which vehicle entered

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  • Germany
  • UAE
  • Mexico
  • Argentina
  • Peru

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