Seven out of 10 drivers believe their auto insurance company judges them unfairly when setting premiums. That’s not just a complaint—it’s data from Arity’s latest consumer sentiment report, which surveyed 1,000 U.S. drivers who often struggle with insurance access due to past violations, lapsed coverage, or low credit scores.
The disconnect? Most respondents say their current policy doesn’t reflect how they actually drive. Instead, insurers rely heavily on personal traits—like credit scores and old traffic tickets—that don’t measure your day-to-day safety behind the wheel. According to the report, drivers want something different: transparency, accuracy, and control over how their premiums get calculated.
This isn’t just about fairness. It’s about your wallet.
Why 70% of Drivers Feel Misjudged by Auto Insurers
Gary Hallgren, President of Arity, summed it up: “Drivers are telling us loud and clear: They want accuracy, transparency and control.”
The problem starts with how premiums get set. Traditional insurance pricing models weigh factors like:
- Credit scores: A low score can spike your premium by 20-50%, even if you’ve never caused an accident.
- Past incidents: A single speeding ticket from three years ago still affects your rate today, regardless of how carefully you drive now.
- ZIP code: Where you live matters more than how you drive in most pricing models.
- Demographic assumptions based on age, gender, or marital status rather than actual risk.
None of those factors measure your current driving behavior. You could be the safest driver on the road—smooth braking, no hard accelerations, never exceeding speed limits—and still pay high premiums because of unrelated personal traits.
That’s the disconnect Arity’s survey exposed. Drivers surveyed included those with characteristics that complicate insurance access: lapsed policies, traffic violations, or credit challenges. These are people who already face higher rates. Now they’re saying the system doesn’t even measure what matters most—how they actually drive.
What Drivers Actually Want: Behavior-Based Pricing
The solution isn’t complicated. Drivers want insurance companies to judge them on what they do behind the wheel, not who they are on paper.
Hallgren explained: “This survey sheds light on what drivers actually want from insurers: pricing grounded in their actual driving behavior, not just personal traits or outdated assumptions.”
Behavior-based insurance (also called usage-based insurance or UBI) tracks real-world driving habits using telematics devices or smartphone apps. These systems monitor:
- Hard braking events that indicate sudden stops or tailgating.
- Acceleration patterns showing aggressive driving versus smooth, controlled acceleration.
- Speed relative to traffic conditions rather than just raw speed numbers.
- Time of day and mileage to assess exposure risk (driving at 2 AM on weekends carries higher risk than 10 AM on Tuesdays).
- Phone distraction while driving.
Safe drivers save money. Risky drivers pay more. Simple.
Several insurers already offer these programs—Progressive’s Snapshot, State Farm’s Drive Safe & Save, Allstate’s Drivewise—but adoption remains limited. Many drivers don’t know these options exist or worry about privacy concerns with tracking technology.
The Trust Gap: Why Transparency Matters More Than Ever
Arity’s findings reveal something deeper than pricing complaints. They expose a trust problem.
When 70% of drivers feel unfairly judged, that’s not just dissatisfaction. It signals a fundamental breakdown in the insurer-customer relationship. You pay premiums for protection, but if you don’t understand how those premiums get calculated—or worse, if you believe the calculation ignores your actual risk—trust erodes.
Hallgren put it this way: “This moment is about more than pricing. It’s a chance to strengthen the relationship between insurers and drivers.”
Transparency could rebuild that trust. If insurers clearly explained how much weight credit scores carry versus driving behavior, consumers could make informed choices. If drivers saw real-time feedback showing how specific actions (like reducing hard braking) lowered their premiums, they’d feel more control.
Right now, most drivers receive a bill with no clear explanation of why it went up or down. That opacity breeds frustration, especially among those already paying higher rates due to factors outside their control.
Arity’s New Geosight Tool: Smarter Territorial Pricing
Arity isn’t just publishing survey results. The company launched Geosight℠, a new data product that provides ZIP-level driving behavior analytics for insurers.
Traditional territorial pricing relies on broad geographic zones—entire cities or counties—treating all drivers in that area the same. But risk varies dramatically even within a single ZIP code. A suburban residential street has different accident patterns than a commercial corridor two miles away.
Geosight analyzes actual driving behavior patterns within specific ZIP codes, allowing insurers to price more accurately without relying on demographic proxies. This helps solve two problems:
- Fairer pricing for safe drivers in “bad” areas: If you drive carefully in a high-accident ZIP code, behavior-based territorial data can distinguish you from riskier neighbors.
- Better risk assessment for insurers: More accurate territorial pricing reduces adverse selection (where only high-risk drivers buy coverage in certain areas).
This approach aligns with what Hallgren emphasized: “Drivers want to know their everyday behavior behind the wheel plays a greater role than things like past incidents or credit scores.”
What You Can Do Right Now to Get Fairer Auto Insurance Rates
Waiting for the entire insurance industry to change doesn’t help your budget today. Here’s what you can do now:
Enroll in usage-based insurance programs. If your current insurer offers a telematics program, sign up. Most programs guarantee you won’t pay more than your current rate, and safe drivers typically save 10-25%. Progressive’s Snapshot, for example, has saved users an average of $145 annually.
Compare insurers that emphasize behavior over demographics. Not all insurance companies weigh factors the same way. Some prioritize driving behavior; others lean heavily on credit scores. The National Association of Insurance Commissioners (NAIC) publishes complaint ratios that can help you identify customer-friendly insurers.
Ask about accident forgiveness programs. If past incidents hurt your rate, some insurers offer accident forgiveness that prevents one violation from affecting your premium. This won’t fix the underlying pricing model, but it removes one penalty factor.
Improve your credit score if possible. Until insurers shift away from credit-based pricing, a higher credit score saves money. Even small improvements—paying down one credit card or disputing errors on your credit report—can reduce premiums.
Bundle policies for discounts. Multi-policy discounts (home + auto, or auto + renters) often save 15-25%. This doesn’t address the fairness issue, but it reduces your total cost.
The Bottom Line: Your Driving Behavior Should Determine Your Rate
The insurance industry stands at a crossroads. Consumer sentiment data makes it clear: drivers want pricing that reflects how they actually drive, not outdated proxies like credit scores or ZIP codes.
Technology already exists to make this happen. Telematics programs, smartphone apps, and ZIP-level analytics like Arity’s Geosight can measure real driving behavior with precision. The question isn’t capability—it’s adoption.
Hallgren nailed the opportunity: “Drivers want to feel in control. They want clarity instead of guesswork.”
Insurers who embrace behavior-based pricing and transparency will win customer trust. Those who cling to opaque models risk losing market share to competitors who offer fairer alternatives.
For you as a driver, the message is simple: Shop around, ask questions, and demand pricing that reflects how you drive. Because if 70% of drivers feel unfairly judged, chances are you’re one of them.
Frequently Asked Questions
Why do auto insurers use credit scores to set premiums?
Insurers argue that credit scores correlate with claim frequency—people with lower credit scores statistically file more claims. However, this correlation doesn’t prove causation, and it penalizes drivers who may be excellent behind the wheel but face financial challenges unrelated to driving risk. Several states (California, Hawaii, Massachusetts) have banned or limited credit-based insurance pricing for this reason. Critics argue it discriminates against low-income consumers who often have lower credit scores through no fault of their own.
How much can I save with behavior-based auto insurance?
Savings vary by insurer and your driving habits, but safe drivers typically save between 10-30% on premiums. Progressive reports average Snapshot savings of $145 per year, while State Farm’s Drive Safe & Save program offers up to 30% discounts for the safest drivers. The key is consistent safe driving—avoiding hard braking, maintaining speed limits, and limiting nighttime driving. Most programs guarantee you won’t pay more than your current rate even if your driving data shows higher risk.
Do telematics programs invade my privacy?
Telematics programs collect data on driving behavior (speed, braking, acceleration, mileage, time of day), and smartphone-based apps may use GPS location data. Most insurers state they don’t track specific locations or share data with third parties beyond what’s needed for pricing. However, privacy policies vary by company. Before enrolling, read the fine print on data collection, retention, and sharing practices. Some programs let you turn off tracking when not driving, which limits location monitoring. If privacy concerns outweigh potential savings, you can skip telematics and focus on other discount strategies.
Which states have banned credit-based insurance pricing?
Three states completely ban credit-based insurance scoring: California, Hawaii, and Massachusetts. Michigan prohibits using credit scores for auto insurance but allows it for other insurance types. Maryland and Nevada heavily restrict how insurers can use credit data. If you live in one of these states, your premium gets calculated without credit score factors, which often benefits consumers with lower credit but clean driving records. Other states allow credit-based pricing but require insurers to disclose when it affects your rate.
Should I switch to an insurer offering behavior-based pricing?
If you’re a safe driver paying high premiums due to credit issues, past violations, or demographic factors, switching could save you hundreds annually. Compare quotes from insurers emphasizing telematics programs (Progressive, State Farm, Allstate, Liberty Mutual) and check their complaint ratios through the NAIC. Run a full comparison including your current insurer’s telematics option—sometimes your existing company offers competitive behavior-based programs you haven’t explored. The key is getting multiple quotes and asking specifically about usage-based insurance discounts before making the switch.