Thousands of Canadians Enrolling in Cost-Saving, Usage-Based Insurance Plans

Since incorporating usage-based insurance plans last May, more than 50,000 new customers have signed up for the Ajusto service offered by Desjardins to Quebec and Ontario drivers.

While the 10% off in the first year just for trying Ajusto has its appeal, getting up to 25% based on safe driving habits may keep drivers enrolled for the longterm. Data collected from the small telematics box installed in a car tracks distance travelled, extent/frequency of hard braking and sudden acceleration, as well as time of day the vehicle is driven.

One group especially keen to adopt the UBI plans are parents of young or newly licenced drivers who generally have higher premiums because of the lack of driving experience and the fact that younger drivers have historically been responsible for a disproportionate amount of car accidents. While only about 13% of licensed drivers in Canada are 16-24 years old, State Farm reports that 24% of fatalities and 26% of serious injuries on the road tend to be attributed to this young age group.

But with a data monitoring device capturing relevant information, young drivers may have solid proof that they are safe on the roads and worthy of discounted insurance premiums.

There will be plenty of opportunity for younger drivers to participate in these programs since several other insurance companies have already been accepted by the Financial Services Commission of Ontario (FSCO) to implement UBI plans including CAA Insurance, Intact, Allstate and The Co-operators. In Alberta, the Office of the Superintendent of Insurance will make its decision on the approval of usage-based auto insurance by December, but is stressing that consumer privacy must be carefully considered by insurers who want to launch programs.

The Alberta government will no doubt be impressed with some of the information uncovered by Desjardins over the past year: two-thirds of Ajusto customers say they are more aware of how they drive and nearly half believe their driving has improved.