Device tracks driving habits to help set insurance rates
MONTREAL — Cars are already connected with automated parallel parking and Internet-based entertainment, and now technology can track driving habits like hard braking that could affect a driver’s insurance rates.
Known as usage-based insurance, a small wireless device is installed into a vehicle’s diagnostic port and measures distance travelled annually, frequency of hard braking and acceleration, as well as time of day the vehicle is driven to determine savings on insurance.
Already in use in the U.S., U.K. and parts of Europe, usage-based insurance was recently launched in Ontario and Quebec on a voluntary basis by Desjardins Insurance and its subsidiary, The Personal Insurance Company.
“We cannot use the data to cancel, not renew or increase the premiums, or use it for a claim,” said Denis Cote, vice-president of marketing at Desjardins.
“It’s written in black and white on the conditions. The information is only accessible to the customer,” he said.
A driver gets regular feedback by checking online and the program will show on a map where any hard braking was done and how many times, for example. But Cote said the program doesn’t know a driver’s destination.
The program, known as either “Ajusto” or “Intelauto,” has more than 20,000 participants in both provinces and users can opt out of the program. Cote said Desjardins is planning to offer it through its subsidiaries in the rest of Canada once it gets regulatory approval.
“Once a month, we do update the savings you’re going to get,” he said, adding it also reduces the insurance company’s costs as a result of better driving.
Customers can save up to 25 per cent on their insurance. Cote said when Desjardins employees tested the program, the average savings was 12 per cent.