“Pay how you drive” puts the brake on insurance premiums

| By Andrea Auer |
Source: iStock / Geber86

New developments in technology are ushering in the arrival of new insurance products. One is “pay how you drive”, which is a further development of “pay as you drive” and plans that require the fitting of crash recorders. Comparis answers five key questions for you:

What is “pay how you drive”?

The car insurance plan “pay how you drive” (PHYD) is one in which a person’s driving style determines how high the premium is. Depending on the provider, a tracking device or smartphone may be used to record the driving behaviour (speed, braking, frequently used type of road etc.) of the policyholder and relay it to the insurance company for analysis. If the policyholder's driving style is considered “good”, the premium payable will be lower. However, this discount system does not punish “bad” driving either. In most cases, drivers receive a lower rate simply for using the tracking device.

Note: A basic premium is used to calculate the actual premium payable in each case. As this can vary from insurer to insurer, it’s a good idea to compare premiums.

How does it differ from “pay as you drive”?

A similar plan – “pay as you drive” (PAYD) – simply records the distance driven. With PHYD, the device may, depending on the plan, record how you accelerate, take corners and brake, as well as your speed and how long you drive without taking a break. Some providers also like to know at what times drivers are typically on the road, and what type of road they tend to use.

How does it differ from products based on crash recorders?

Unlike crash recorders, PHYD devices record all data. The use of telematics means that this data can even be transmitted to the insurer in real time. Crash recorders, on the other hand, only store data in the event of an accident – the information from the recorder is then analyzed manually by the insurance company after the accident. The main purpose of a crash recorder is to help identify the causes of an accident and where the blame might lie.

Which insurers offer usage-based insurance plans?

In Switzerland, there are currently five different providers of usage-based insurance products. Some insurers limit their product to particular target groups.


Product name


Who can benefit?



Crash recorder

Young drivers up to 25 years


FlexDrive (in German only)

Pay as you drive

All car drivers



Pay as you drive & pay how you drive

All car drivers

Swiss Mobiliar

CleverDrive (not available in English)

Pay how you drive

Young drivers up to 26 years


Avenue Smart (not available in English)

Pay how you drive

Young drivers up to 30 years

What are the advantages of “pay how you drive”?

PHYD has two main benefits:

  • Lower premiums: you can usually get a lower premium just by installing the required tracking device.
  • Better driving habits: depending on the product, you can view your own driving style by means of an app, and use this information to improve your driving.

  • Compare car insurance now

    What are the disadvantages of “pay how you drive”?

    The two major drawbacks of PHYD are the price and the fact that personal driving style information is forwarded to the insurance company. However, given current levels of data transparency, the latter is not particularly unusual these days. Many car manufacturers, for instance, already know quite a bit about the driving habits of their car owners. On-board computers record driving data and often even the location.