The Future of Car Insurance is UBI
The road ahead for auto insurance lies in telematics, a discipline that intersects electrical engineering, computer science, telecommunications, and vehicular technologies. When these branches of study intermingle, the result is new technologies that allow car insurance vendors and drivers to benefit. Whether you’re in Kitchener, Waterloo or elsewhere in southern Ontario, telematics pave the way towards usage-based insurance (UBI).
Car Insurance That’s for People, Not Demographics
Prior to UBI, auto insurance rates were frequently based—in part—upon statistical data. For example, statistically speaking young drivers have more accidents than drivers who are more advanced in years. Therefore, a twenty-year old will pay a higher premium than someone twice their age. But with UBI, rates are customized for individuals and their specific driving habits.
How It Works
UBI relies on technology that records and reports the way an individual drives their vehicle. Behaviours surrounding frequency of driving, time of day driving, speed, acceleration rate, cornering and braking, are transmitted wirelessly back to the insurer. This means lower rates can be offered to drivers who are less likely to be in an accident based on their individual performance and actual time spent on the road. Drivers who engage in riskier behaviours and spend more time behind the wheel will likewise be offered a rate that’s reflective of their true habits.
Both insurers and drivers stand to gain with UBI. Insurers win because they can offer rates that are more competitive and still protect against losses. Drivers win because they can gain low rates that are earned upon merit and fewer miles driven. The usual standards don’t apply. Regardless of sex and age, if you’re a driver who’s safe on the road, your rate will be more cost effective. You will also pay less if you drive infrequently, whether you are in Kitchener, Waterloo, or elsewhere.
The Hidden Advantage of Usage-Based Car Insurance
UBI makes roads in Waterloo, Kitchener, and throughout southern Ontario safer for all. How? Drivers who are constantly being assessed on their driving performance have been shown to execute safer behaviours on the road. One study conducted by the Norwich Union found a decrease in accidents of upwards of 20% in drivers aged 18 – 23. Some developers have also implemented a gamification aspect to their telematics, making safe driving not only monetarily advantageous but fun for participants.
UBI Is on the Rise
More and more insurers are offering UBI to their drivers. At D.A. Kurt Insurance Brokers, we look forward to being able to offer this option to our clients. We keep up on the latest in car insurance so that our clients can always get the best possible rate. Contact us today to learn more about telematics or to make an appointment with one of our knowledgeable brokers.