Nova Scotians Wary of Usage-based Insurance
While the auto industry is typically one of the fastest paced industries when it comes to technological development and adoption, the same cannot be said for auto insurance.
The last few years have seen the rise of all sorts of vehicular gadgetry from smartphone integration to the replacement of mirrors with cameras. Technological integration with vehicles aims not only to entertain us, but to keep us safer on the road and make driving more convenient. There was a time when you’d have to know how to read a map if you wanted to get somewhere you’ve never been. Now everyone has a GPS right there in their pocket.
The saturation of technology in our daily lives should make the idea of updating the way auto insurance premiums are calculated fairly simple, and it certainly can. By collecting driving data for each individual driver, an insurance company can now charge premiums that are actually based on the way someone drives instead of arbitrary things like the car they drive or their age. But in Nova Scotia the idea simply isn’t taking off.
According to CBC some insurance companies in Nova Scotia are offering savings of up to 25% for drivers who participate in the program. Under the program drivers install a small device in their car for six months that monitors things like driving distances, sudden acceleration and braking, and the times of day the car is driven. After the six month period the data is turned over to the insurance company and they determine whether the driver gets a discount or not.
Even if the person drives badly, their insurance won’t go up, but will stay at their current rate.
Despite this, privacy concerns are keeping people from trying out the new technology. While it’s true telematics would add to our already large digital footprint, the data supplied would be no more invasive than many of the things already submitted to insurance companies. Keep in mind that cars are not actively tracked by GPS or connected to an insurance company’s network.
While the idea may take some getting used to, it is generally agreed upon to be the logical next step for the auto insurance industry. Why wait to save money?