Most large auto insurers now offer customers an interesting way to save on car insurance: pay-as-you-drive auto insurance. Basically how it works is companies collect data via onboard infotainment units or from devices that plug into OBD ports of your car’s on-board computer. The data is then transmitted back to your insurance company through a secure server.
In return for providing data on their driving habits, motorists can earn discounts that, at least in some cases, can save them as much as 30 per cent off their premiums. For younger drivers, who have grown accustom to sharing large amounts of their personal information on social media, they are likely to feel comfortable sharing that data.
But according to Insurancequotes.com, twenty-seven per cent of motorists between ages 50 and 64 say privacy concerns would stop them from enrolling in this type of insurance. Twenty-seven percent of respondents in the survey also claimed “unfamiliarity with how it works” as the main reason for avoiding usage-based insurance.
So how does it work exactly?
Well, it really depends on the insurance company. Some insurers collect basic information like time of day and distance travelled, while some are more comprehensive, gathering much more accurate and very detailed data, such as the speed you drive and how hard you brake.
Kinda creepy, isn’t it?
While this type of usage-based and monitored insurance is still fairly new to Canada, Desjardins Insurance offers a similar program and allows clients to opt out at any point. Based on the driving data collected and monitored, customers who opt in could be eligible for up to 25-30 per cent in discounts compared to regular auto insurance premiums, which represents a significant saving.
For motorists worried about being tracked, those concerns may already be irrelevant. Data is already streaming off millions of newer cars on the road. From now-mandatory black boxes under the hood to satellite-based navigation systems available on most vehicles, automakers are already capable of tracking an extensive amount of diverse driver data.
Unless you’re lucky enough to own some sort of classic car without any form of modern technology, your driving is probably already capable of being tracked. So the only reason not to join the increasing trend of pay-as-you-drive car insurance would be that heavy right foot.