Usage-based insurance (UBI) has spiked in popularity as Canadian drivers find themselves driving less since the arrival of COVID-19. Wondering if usage-based car insurance is right for you? We’ve put together a guide to help break down the FAQs of UBI programs. 
 
What is usage-based insurance? 
A usage-based insurance program offers drivers more control over their car insurance rates. Rather than relying on traditional factors and statistics, such as age and driving history, to calculate your car insurance premium, UBI programs primarily rely on telematics to understand how often you drive and how safely you drive. 
 
To participate in a UBI program, you must install a wireless telematics device in your car or download a UBI app on your smartphone (depending on the program). The device or app then provides your insurance provider with information on your driving behaviours. Your insurance rates are then calculated accordingly — rewarding good driving behaviours and less time on the road with discounts and cost savings on your premium.
 
Common driving behaviours considered in a UBI program are: 

• How often and how far you drive

• What time of day you drive

• Speed in relation to posted limits

• Braking and acceleration

 
What discounts are available with usage-based insurance? 
Depending on which usage-based insurance program you choose, how much time you spend on the road, and how safely you drive, you could save greatly on your car insurance premium. 
 
Some examples of UBI programs and their discounts currently available in Ontario include:

Aviva Journey
Aviva Journey offers up to an instant 10 per cent discount upon sign up, and up to a 20 per cent discount based on your driving habits. The Aviva Journey app gives you the ability to review what driving factors affect your insurance premium in real time. Using basic sensors in your smart phone, the app will notify and reward you for safe speeds, smoothness/control of your vehicle, and attentiveness on the road. Upon renewal the enrolment discount is replaced by your earned discount of up to 20 per cent.

Intact my Drive
The Intact my Drive app offers drivers up to a 30 per cent discount on their car insurance based on their driving habits and overall “safety score”. Drivers will receive a one-time 10 per cent discount when they enroll in the program. Their discount is then recalculated every six months based on their “safety score” factors — including distracted driving, rapid acceleration, hard braking, speeding and risky driving hours. 
 
CAA Connect
CAA Connect offers drivers up to a 15 per cent discount on their premium after one year along with an introductory five per cent discount for the first year. To maximize their discount, drivers enrolled in this program must use the OBD device supplied by CAA and should drive less than 12,000 km per year, avoid speeding and avoid driving between the risky hours of 12:00 am to 4:00 am. 
 
CAA My Pace
This program differs a bit from the others mentioned above as a pay-as-you go solution since it doesn’t track behaviours, only the distance you drive annually. CAA My Pace offers drivers a five to 75 per cent discount on their car insurance depending on how many kilometers they drive. Low-mileage drivers who drive only up to 1,000 km per year are eligible to save up to 75 per cent, while drivers who drive up to 8,000 km per year are eligible to save up to five per cent. 

How is the data collected used by my insurance provider?
The data collected by the wireless telematics device or the UBI smartphone app is used by your insurer to determine what discounts and cost savings you may be eligible for based on your overall driving behaviour. All data is stored in a secure server and is protected under Canada’s Personal Information Protection and Electronic Documents Act. The data collected by your insurer may be shared with third parties when required by law — such as in the case of a collision. 
 
To better understand what data, you are sharing with your insurance provider, how it will be stored and how it will be used, review your policy’s terms and conditions, or speak with your insurance broker.
 
If you have questions about your current car insurance coverage and/or eligibility for a usage-based insurance program, contact us at 1-833-494-0090. If you would like to get a quote for car insurance, contact an OTIP broker today at 1-888-892-4935.
 
Providing access to personalized insurance is just one of the ways OTIP is here to help our members save money. If you’re in the market for a new car, check out the CARCOST offer on the Edvantage website and get the best price on your next new car.