This differs from traditional insurance, which attempts to differentiate and reward "safe" drivers, giving them lower premiums and/or a no-claims bonus.
This means that it may take a long time before safer (or more reckless) patterns of driving and changes in lifestyle feed through into premiums.
[1] Pay as you drive (PAYD) means that the insurance premium is calculated dynamically, typically according to the amount driven.
For example, if a commuter switches to public transport or to working at home, this immediately reduces the risk of rush hour accidents.
[12] In September 2010 Progressive Auto Insurance filed a declaratory judgment lawsuit against Hughes Telematics to have several its patents covering OBDII mounted wireless data loggers declared invalid.