Usage Based Insurance
Whether you agree with it or not, the use of modern technology to monitor driving behaviour is becoming very popular and can translate to better premiums when applied through Usage Based Insurance (UBI).
User Based Insurance is the method of monitoring a driver’s behaviour and habits behind the wheel and using the information to determine an insurance premium. And, considering that most, if not all, moderen vehicles come equipped with computer controlled systems, adding another electronic component to the vehicle’s functions should be fairly straight forward.
Sometimes referred to as “Telematics”, UBI uses technology to keep track of driving behaviour via a device of some sort, be it an app for your phone or an electronic component hardwired directly into the vehicle. Some of these devices are constantly monitoring the vehicle’s actions, some require the device to be turned on or the app to be opened and a program to be started prior to an “event” ( the beginning of your road trip).
Not all insurers monitor the same behaviour, and some are concerned with the basics while others want more information. If you’re unsure about what your insurance provider keeps track of, ask your broker to clarify just what is and isn’t monitored to ensure it is personally acceptable.
8 Driving Behaviours That A UBI Device Might Monitor
- What Time Of Day You Are Driving. Certainly, the time of day that a vehicle is being driven makes a difference in regard to risk but, interestingly, most of the danger and higher risk occurs between the hours of midnight and 4:00 a.m..
- How Far You Drive. Distance equals time on the road and a potential increase in risk exposure.
- How Fast You Accelerate. Chances are that a driver who is heavy on the gas pedal on a regular basis is an aggressive driver and this can lead to possible issues.
- How Hard You Brake! Just like the driver in #3, constnat hard braking indicates aggressive driving behaviour or lack of “read and react” defensive driving skills, either of which may lead to possible problems.
- How Often You Drive. Perhaps you’re not driving very far but making multiple short trips and doing so on every day of the week, so your frequency on the road adds risks
- Which Routes You Take. Some roads are riskier than others and historical data collected may indicate that use of certain routes may put a driver in to a category that has higher potential for an accident.
- High Speed Roads. Similar to #5, using roads that have higher speeds means less opportunity to avoid possible accidents and greater potential for catastrophic loss should there be one!
- Cell Phone Usage While Driving. Although many vehicles have phone sync options, using a cell phone while operating a vehicle is a distraction and therefore a risk factor.
Consider The Following…..
Most monitoring apps or devices are fairly basic and track the first 4 driving behaviours mentioned above, but some insurers want more details and may offer higher discounts when these additional factors are considered in the mix.
Most insurers will offer an insurance premium discount for “good driving behaviour” but will not raise a driver’s premium if their data does not fit into this category. In other words, a driver won’t be penalized if their driving habits are less than ideal.
Everyone believes themselves to be excellent drivers and quite often people are surprised to learn that they display behaviours that are not considered ideal. Telematic devices may be considered a “teaching tool”, notifying drivers of certain driving habits that need to be corrected.
It’s estimated that over 95% of vehicles on the road have Event Date Recorders (EDR) built in to their computer systems and these devices track specific driving data, originally intended to help improve safety but also accesible by the police during accident investigations, especially if there are serious injuries or death.
Many people are concerned about their privacy when it comes to being monitored by a telematic device but considering the point about EDR and the fact that your vehicle is already monitoring a lot of your driving behaviours, plus your cell phone is likely adding additional data, this information is being collected whether you want it to or not.
Basically, the use of telematics and the idea behind UBI is to get some basic information and offer a discount to the drivers who are not driving very far or very often, and who display good driving behaviour that merit reward. BlueCircle represents several insurers who have programs that fit this category and we’re always ready, willing and able to discuss how this may work well to help you reduce your insurance premiums.
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