No one wants to pay more for car insurance than is necessary. Trying to influence your premiums by improving your driving habits is effective, but only over a long period of time. Speeding tickets stay on your record for up to five years, and at-fault accidents could haunt you for 10 years or more. What if you could show you’re a good driver immediately, as you’re driving now, not a decade in the past? Would insurance companies lower your rates if they had that data? Yes, you can, and yes they will. Usage-based insurance is a trend for the industry, and it’s based on how you drive your car now.
Currently, there are two types of telematics insurance programs active in Ontario. The first uses a small device that plugs into a diagnostic port under the dash on the driver’s side. This device typically gathers information about acceleration, braking, and time of day. Insurers using this type of plan offer immediate savings of 5 or 10 percent, depending on the company, right away, simply for participating in the program. Good driving habits as reported by this device may offer up to 25 percent in additional savings. The other telematics program uses the capabilities of contemporary smartphones.
Ajusto Smartphone Drive Apps
Introduced in Quebec by the Desjardins Insurance group, Ajusto is available for either iOS or Android platforms. Smartphones must be recent to support the app. Its internal motion detectors, sensors, and GPS capabilities sense when the phone is in motion. Like the diagnostic port device, the Ajusto app senses acceleration and braking, time of day. Additionally, it can track miles driven. The app gives drivers feedback based on current driving habits. Within minutes of completing a drive, the app gives a rating out of five stars, for speed and smoothness. Ajusto also notes distance and time of day and issues a score out of 100. Average scores over time are combined to qualify a driver for discounts. A further monitor checks for other smartphones used to measure distracted driving.
The app doesn’t hog data and it can be configured to use Wi-Fi only. Neither does the device overtax smartphone batteries. The app won’t engage or will shut down if battery life is under 15 percent.
While insurers using either telematics method assure that data from these devices can only lower premiums and not raise them, there are concerns about data leakage on smartphone platforms. Critics argue that reporting the locations of drivers can be incredibly revealing. To work, apps like Ajusto are constantly running in the background. Insurers insist that collected data is safe, only accessible through a court order. Though currently this is stated in terms of service, there may be little to protect a consumer against future changes. At the moment, all telematics, usage-based insurance programs are voluntary. If a client is overly concerned with privacy invasions, then they can simply choose not to participate. Given the comfort younger drivers have with smartphone technology, though, insurers are looking for an increase in participation.