(Photo credit: Ambah/SXC)
If you’re a good driver, you’re probably wondered why you’re stuck paying high insurance rates thanks to where you reside, there’s a chance your car insurance rates could come down with usage-based insurance (UBI).
UBI uses telematics, electronic technology that is installed into your vehicle to help insurance companies track your driving habits, including data such as your braking habits, acceleration and speed. All this data is used to assess a driver’s risk, which influences their insurance rates. UBI is currently used in Europe and the United States, but it’s slowly being introduced in Canada.
Desjardins General Insurance Group was the first insurance company to receive approval for a UBI program in Ontario last May and since then the company has attracted 45,000 new customers, a spokesperson told the Toronto Star. The company also operates a UBI program in Quebec.
Co-operators recently announced its UBI program called en-route Auto Program, which offers drivers a five per cent discount on their auto insurance to sign up. Upon sign up, drivers can receive up to a 25 per cent discount to their premium based on their driving habits. With Co-operator’s program, the device will be installed and once the vehicle has been driven with the installed device for 125 days and 1,000 kilometres, the discount will be recalculated. Drivers who choose to sign up with the program will not see their premiums increase.
Meanwhile, Intact Financial is expected to launch its own UBI program in April and the Canadian Automobile Association expects received approval to launch its program sometime this year, according to the Toronto Star.
UBI programs are expected to lower auto insurance rates by an average of 12 per cent, as well as help curb auto insurance fraud. But insurance companies first need to be approved by the Financial Services Commission of Ontario.
Canadians are interested in UBI with 56 per cent saying they have a strong interest in a UBI policy, according to a poll by Towers Watson. Drivers are even more receptive to the idea if they’re guaranteed that their premiums will not rise.
In Ontario, drivers pay the highest auto insurance rates across the nation, which at times can be five times the cost of other provinces. By August of this year, the province hopes to reduce rates by eight per cent and they will aim to reduce them further.
In the unfortunate scenario where you need to collect vehicle accident benefits due to an injury, the personal injury and accident lawyers at Neinstein Personal Injury Lawyers can help. They have been dealing with all accident related issues throughout Ontario for over 45 years. We know how to get you the compensation that you deserve and get your life back in order after being in a car accident. Call us at 416-920-4242, set up a free consultation, and come speak with us.
Greg Neinstein
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