Time and mileage can be used to measure actual car usage and although there is a strong correlation between the two under certain conditions, measuring time provides more finely-tuned, effective data. Furthermore, time parameter is the “solution-of-choice” when a real and fast impact on air pollution, traffic congestion and efficient road usage are of interest. NHTSA. data show that risk exposure is better assessed when time of day and length of time the vehicle is being used are taken into consideration.

When the measured parameters are the “Hour of Travel” and the “Duration of Travel”, an incentive could motivate drivers to slightly change their habits - drive a little earlier or later and enjoy cost and time savings in return. The overall impact of this slight habit change can significantly reduce GHG emissions, road congestion and accident rate. The incentive could be in a form of a reduced cost per minute when driving at low-congestion, low-risk hours or in the form of higher rate for drivers who choose to drive at high-congestion, high-risk time of day.

Using time rather then mileage allows insurance companies to set their premiums according to the actual usage in such a way that they could influence driving habits substantially, which in turn would reduce their risk exposure. Reduced premiums could be charged at off-peak,
low-risk hours of the day while higher premium rates could be applied when driving at high-risk hour of the day (i.e. rush hour; between midnight and dawn on weekends)*. Drivers who use their cars less time than average and thus reduce their risk exposure, would enjoy lower premium costs.