What Information is Collected for Usage-Based Insurance?

Why Does Usage-Based Insurance Need Information?

It’s a completely fair and valid concern to be skeptical of companies taking your information. This is especially true when you don’t know why people are taking your information or what it is that they’re using it for. However, learning this information can put people a lot more at ease, as it helps settle their concerns.

Usage-Based insurance (also known as UBI) relies on a smartphone app. All you do is turn on your phone and app, and then drive around like normal. Your app will collect information based on how you drive and how it affects the safety of yourself and others which will determine the cost of your auto insurance premium. Although this may cause concern about the app determining things like your home address, you must remember that insurance companies already have this information if you are their client. There are also strict laws in place stopping insurance companies from selling information to third parties. The knowledge that the information given over is safe should create peace of mind in knowing that nothing valuable is being compromised. If you have any further questions, your Morison Insurance broker would be happy to answer them.

Information Requirements for UBI Policies

Suppose you're a cautious, defensive driver, and you don't even drive all that often. Why do you have to pay the same car insurance premiums as someone with more reckless driving habits or who spends practically all day and night driving around in their vehicle? That's a reasonable question, and an insurance solution is designed to answer it: usage-based insurance.

You may be wondering what types of information your insurance company will be looking at if you opt-in to usage-based car insurance and whether this particular insurance program is right for you. The experienced brokers at Morison Insurance address those questions and more below so you can decide whether you should talk to your broker about joining a usage-based program.

8 Pieces of Information Insurance Companies Collect for Usage-based Insurance 

There are many pros & cons of for usage-based insurance but, when it comes to the kinds of information that insurance companies collect for usage-based programs, it's essential to understand that every insurance provider that offers usage-based insurance has designed their schedule a bit differently. The exact types of information they collect can vary from company to company, along with how heavily they weigh specific metrics and the potential rewards that responsible drivers can earn.

To learn the specifics of each of your usage-based policy options, the best course of action is to contact your auto insurance broker at Morison Insurance and let them know what you're looking for so they can recommend the best fit for your particular insurance needs.

The types of information an insurance company will typically collect for usage-based insurance include acceleration, braking, cornering, speed, time when driving, driving location, driving frequency, and mobile use.

1. Acceleration

 You don’t want to be too hasty when getting out on the road, especially since even a minor slip up can lead to thousands of dollars of damage or even worse. Sudden, rapid acceleration rates indicate aggressive driving habits that increase the risk of a collision. A driver who is more cautious and accelerates more gradually is less likely to collide with another vehicle or do something else that damages their vehicle, or causes physical injury.

2. Braking

While everyone will likely have to slam on the brakes at some point throughout their time driving, this shouldn’t be something that happens regularly. A pattern of hard braking often indicates unsafe driving practices, as it implies that the driver often gets themselves into dangerous situations and needs to brake heavily in order to compensate. As with acceleration, more gradual braking is recommended.

3. Cornering

The angle and speed  at which a vehicle turns a corner. Many of the merging signs on highways, or showing speed limits on tight turns exist for a reason. Drivers should slow down considerably and take corners easily for smooth driving, reducing the risk of an auto accident. Consistently taking sudden hard turns increases the chance of a collision or injury.

4. Speed

The speeds at which you typically drive your vehicle is an important factor taken into account by UBI. This one however is not without important context. You won’t be punished for driving on the highway instead of residential roads, as long as you’re driving at appropriate speeds. The rate you are driving at is compared with a database of speed limits across Canada so your insurance provider can determine if you are following posted speed limits as required. Be sure to follow the posted speed limits at all times!

5. Time When Driving

The time of day when you drive the most is a significant indicator of your risk levels, even though it's not always something you can change. Driving during rush hour, even if unavoidable, is much riskier than driving during much quieter hours. If you must drive to and from work during rush hour every day, you have a higher risk of a collision regardless of how safely you drive due to the increased number of vehicles on the road. If you are able to drive during less busy hours, it is recommended you do so.

6. Driving Locations

Not all miles are equal when it comes to UBI. The locations where you drive, such as quiet side streets versus major thoroughfares, can impact your risk assessment. Although this isn’t always something that you can control, if there’s an alternate path you can take leading down a safer, less crowded path, doing so will likely help you save a little bit on your next insurance payment.

7. Driving Frequency

This one is pretty straightforward—the more time you spend driving, the more opportunities you have to be involved in a collision or some other type of automobile accident, which sometimes affects your insurance results. For this reason, if you’re somehow able to drive less often and/or shorten your commutes, it is in your best interest to do so. Those who drive less will be charged less on their UBI, all other factors being equal.

8. Mobile Use While Driving

Distracted driving is a high-risk behaviour, and mobile phone use is by far the most common distraction, especially in recent years. Taking your eyes off the road even for a second can lead to a collision, especially in higher-risk scenarios. Telematics devices and apps can tell if you're using your phone while your vehicle is in motion and may give you the ability to "tell" the app if you're a passenger at the time.