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Some Drivers Are Not Ready for Telematics
What are telematics / UBI?
Some Drivers Are Not Ready for Telematics.
If you’re looking for a type of car insurance that better reflects your good driving skills, usage-based insurance (UBI) might be a good fit for you. UBI is an option offered by some auto insurance companies that tracks your driving and could result in cheaper car insurance—if your driving scores well.
Usage-based insurance programs generally measure speed, acceleration, gentle or hard braking, overall mileage, and the time of day at which you commute. You receive a driving score and even tips for improving your score. The more cautiously you drive, the better your score and therefore your auto insurance rates will become more affordable. This is a great benefit to all of the careful drivers out there in Ontario (we appreciate you!).
Inflation is another reason why drivers may be interested in usage-based insurance, as it can potentially lower your car insurance bills.
Telematics usage on the rise
More drivers are being offered a usage-based or telematics option for their car insurance. A TransUnion survey in February and March 2022 found that 40% of respondents were offered a telematics program, which was up from 32% in November 2021. The percent of those who were offered a telematics program and opted in also rose to 65%.
Some insurance companies will offer you different options for how you want the date to be collected. For example, Liberty Mutual’s RightTrack offers you the choice between a tag, separate plug-in device, or phone app, while State Farm’s Drive Safe & Safe program lets you choose between a phone app or your car’s navigation system.
How your driving habits affect your car insurance premium definitely depends on the insurer you’re with, but in a typical plan your driving habits are tracked over a certain period of time. After you complete the initial review period, you may be offered a discount based on the telematics data that was collected and analyzed.
Traditional auto insurance pricing factors are also still factored into your rate, such as your past driving record, credit, vehicle type, and city of residence.
Is it worth it for Ontario drivers?
Usage-based insurance holds the promise of lowering your car insurance rates if you’re a very good driver. But it doesn’t work out that way for more than half of drivers who opt into telematics programs. According to a TransUnion survey, car insurance rates decreased for only 48% of those enrolled in a telematics program and stayed the same for 30%.
It’s safe to say that some drivers are not ready for telematics. Not everyone loves the idea of letting their insurance companies get an in-depth, detailed look at their driving behaviors on the road. How driving data is used or shared was the top concern (35%) for survey respondents according to a 2021 Telematics Consumer Survey by Arity, a telematics and analytics provider founded by Allstate.
It’s important to consider that some car insurance companies might RAISE your car insurance premiums if you don’t score well during the review phase of a UBI program. A good chunk of drivers indeed saw their auto insurance rates increase after opting into telematics programs.
Thankfully, most drivers who enrolled in telematics programs were satisfied with their decision to opt in, according to the survey. Nearly two-thirds (64%) were “very satisfied” or “extremely satisfied” with their telematics experience. About two-thirds (64%) of survey respondents said they are still using a telematics program today.
Interested in saving money on your car insurance? Ask a broker for advice today! Visit the quote page of the My Hunter Insurance website or call 1-877-454-4476 to request a quote from one of My Hunter’s licensed brokers.
By Dan McDonald, Marketing Coordinator at My Hunter