When a driver chooses to utilize usage-based insurance (also known as UBI, or Telematics), the vehicle driver downloads an app to their phone which monitors all types of data on how that vehicle is driven.
UBI monitors key risk factors associated with driving a car, and the technology assesses three main areas:
- The distance you drive
- The time of day when you are on the road
- When and how you accelerate and brake
The purpose of the monitoring device is to charge an insurance premium that matches the driver's risk. By doing so, insurance companies can analyse the data and give discounts for “good” driving behaviours, often in the form of discounts. These discounts can add up to about 30% of the premium total.
Beyond the savings, usage-based insurance offers two other main advantages:
- If you’re involved in an auto accident, the information from the app can help determine fault.
- Simply knowing driving habits are monitored naturally encourages better driving behaviour, making roads safer for other drivers and pedestrians!
Usage based insurance is known to be a more accurate method of determining a fair auto insurance premium.
Some people feel they don’t want their driving habits monitored; however, the collected information is subject to strict privacy policies and cannot be used for any other commercial purposes without express consent.
If you would like to learn more about this growing type of auto insurance, please reach out to us for more information:
chris@gibbinsurance.ca or call: 519-736-8228