Seven things you need to know about usage-based car insurance

KOBA revolutionises car insurance with pay-per-kilometre policies

You only pay for the amount of electricity you consume each month, and you only pay for the food you choose to put in your trolley at the supermarket, so why pay any more for car insurance than you have to?

Launching in November, KOBA Insurance, Australia’s first real-time kilometre-based car insurer is making sure you don’t. They’re flipping existing policies on their heads by placing the consumer in control of their car insurance costs.

With KOBA, you pay an upfront cost to cover your vehicle when it is parked and by taking advantage of cutting-edge connectivity technology, then you only pay for the kilometres you actually drive.

The company facilitates this via a KOBA Rider – a small matchbox-sized device that attaches to the car’s onboard diagnostic (OBD) outlet and communicates with a smartphone app to record when the vehicle is driving and charges you a small per-kilometre rate for each trip.

It’s a smart and fuss-free solution that is more transparent and can be more affordable than conventional insurance coverage – especially if you drive limited distances each year.

So, considering more of us are working from home more these days, and therefore driving less, here’s seven reasons why you should only pay for what you need.

1. A KOBA policy has you covered
KOBA provides comprehensive car insurance with coverage for fire, theft and accidental damage, as well as offering additional benefits such as expenses for travel and accommodation, towing, a hire car replacement if the vehicle is stolen and agreed value (with new car replacement in the first 24 months of its original registration) if the vehicle cannot be recovered or repaired. Basically, you pay an upfront cost for coverage when the vehicle is parked and a few cents per kilometre when the vehicle is being driven.

2. KOBA automatically knows when you’re driving
The KOBA Rider is a small communication device that is connected to the vehicle’s OBD computer outlet. This is usually located behind a panel in the lower section of the dash and is used when servicing or repairing the vehicle to monitor codes that indicate if a system or component is not functioning properly. The KOBA Rider collects important real-time data from the moment the vehicle is switched on that recognises the vehicle’s location and relays the data to your smartphone app.

koba man smiling

3. KOBA uses data to determine the price
Like all insurance providers, both the fixed upfront cost and the per-kilometre rate is determined by a number of factors including the value of the vehicle, where you live and your driving experience. The unique aspect of KOBA’s pricing relies on the concept that low-usage drivers pose less risk and are involved in fewer accidents and this allows KOBA to offer low-cost rates to customers.

4. So how much can you save?
That will entirely depend on how many kilometres you drive, and how often. If your vehicle is rarely used because you’re working from home more often, the savings could be substantial. KOBA estimates that low-usage drivers who generally drive less than 7000km per annum could save up to 25 per cent compared to high-usage drivers.(1) However, the biggest benefit is for those that use their car infrequently. Normally, an insurance policy rate doesn’t vary because you’re forced to work from home and use your car less. With KOBA, what you pay changes based on the distance covered each month.

5. What about the privacy and security of my data?
The KOBA Rider communicates between the vehicle and smartphone app and is encrypted for maximum security. Data security and privacy is a critical element of KOBA’s service and the distance and location data is used to determine your per-kilometre rate. All the other data collected from the vehicle is used for the benefit of the customer through personalised services.

6. Will KOBA make me a better driver?
KOBA plans to introduce a range of personalised services in the future, and these could include monthly reports on driving behaviour to assist drivers to lower carbon emission outputs, decrease fuel consumption and help reduce the risk of speeding. Indeed, KOBA technology could be used in the future to provide customers with insight on vehicle maintenance issues or emergency services alerts when the vehicle is involved in a serious collision.

7. Will KOBA work with my car?
The KOBA Rider can only be fitted to vehicles with OBD II outlets, which limits its use to passenger cars and light commercial vehicles built from 2006 onwards. KOBA plans to introduce technology that will allow owners of older vehicles and motorcycles to have the device fitted to their vehicles in the future.

So, there you have it, seven simple reasons why usage-based insurance can save you time and money and how KOBA is, quite literally, putting the future of car insurance in the driver’s hands.

For more information on KOBA Insurance, visit

KOBA Insurance Pty Ltd (KOBA) (ABN 33 642 789 286, AR number 1288655) is authorised to deal in the insurance which is issued by Eric Insurance Limited (eric) (ABN 18 009 129 793, AFSL 238279). Any advice provided is general in nature and does not take into account your particular needs and circumstances. Before purchasing the insurance, decide whether this product is right for you by reading the Product Disclosure Statement and Target Market Determination – which will be available on the KOBA website prior to launch.

Source: (1) – The Australian Bureau of Statistics estimated that in 2018 the average passenger vehicle in Australia travelled 12,600 km per year. Insurance premiums are often based on these averages and our comparison is based on a driver with a KOBA policy driving this distance.

Koba one of the ten leading insurtech companies in Australia

To find out which Australian insurtech companies are taking advantage of these partnerships or carving their own path, Insurance Business referred to business information website Crunchbase’s data. Read more….

KOBA Insurance
Total funding: $1 million
Number of investors: 1

Victoria-based KOBA Insurance says its mission is to help more than 10 million Australians lower their annual premiums by only charging them for what they use. The insurtech firm uses a pay-as-you-drive platform, meaning policyholders will only be charged each month based on how much they travel.


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