Usage-based insurance rating relies on data collected from what kind of device?

Usage-based insurance (UBI) rating primarily depends on data collected from on-board diagnostics devices installed in vehicles. These devices gather real-time information about driving behavior, such as speed, acceleration, braking patterns, and mileage. By analyzing this data, insurers can assess individual risk profiles more accurately and offer personalized premiums based on actual usage rather than standard estimates.

On-board diagnostics are typically part of the vehicle's built-in system that communicates various performance and maintenance information, making them a reliable source for insurers to evaluate a driver's risk factor. This technology allows insurers to reward safe driving habits with lower premiums and encourages safer driving behavior among policyholders.

While other options like smartphone applications and telematics from third-party vendors also collect driving data, the question specifically asks for the type of device used for the primary data collection process in usage-based insurance. On-board diagnostics represent the most direct and integrated method for gathering this essential information directly from the vehicle's systems.