Car Insurance Rate Based on Driving Skills
New technology measures driver skill allows for changes to car Insurance risk rating, lower premiums, now available
Toronto, Ontario (I-Newswire) January 14, 2013 - When it comes to Ontario car insurance, the policy coverage premium rate is largely determined by location, location, location and less so on how one drives. Take for example two identical drivers – same age and sex, same driver history, same car but they live in two very different parts of Ontario. One lives in a place such as Toronto, or better still – Brampton, and the other in Ottawa. The driver living in Brampton pays a far higher rate of Ontario auto insurance when compared to a similar driver in Ottawa. This dated legacy way of rating driver car insurance is being replaced by new technology that measures individual driver behaviors.
This system of rating a driver largely based on geography and class system is still common place around the developed world, as dated as it may be. But while large variations of auto insurance pricing are exhibited from region to region and town to town in Ontario, change is slowly happening. This is coming in the form of new and advanced technologies in the car insurance industry that allows for an insurance company to begin using technology – at the driver level – to rate the propensity of a driver's characteristics, habits and propensity to file a claim. These technological advances will transform how the auto insurance property and casualty industry evolves.
A Move to Driver-Based Insurance Pricing
Just now appearing in Ontario, countries such as the United Kingdom and USA have begun to deploy forms of this driver technology. Although one cannot drive a car on Ontario roads without auto insurance, because this is a competitive industry pricing based on existing rating systems makes most car insurance companies in Ontario competitive with each other. This competition for more customers – or drivers – paying them for their car insurance - is forcing insurers to look to alternative ways to both measure risk better, thereby reducing payout ratios – and at the same time share some of these cost savings with their customers, the insured drivers. At this time insurers are streamlining their practices with new high-tech tools, an eventual big shift in the industry that will save some drivers a lot of money on their auto insurance policies.
These new technologies are driver specific and allow for the first time ever the ability, as an industry, observe individual driving behavior. These new devices, for example, are placed in a driver's car that determines how well – or poorly - one drives. They can track driver behaviours such as if a driver frequently slams on the breaks, corners turns at high speeds, tends to speed in domestic neighborhoods, etc. This information is gathered, assembled and benchmarked to determine the driver's car insurance rate.
A Greater Benefit to the Driver or Car Insurance Company?
The secondary and obvious objective with these technologies is to have it benefit the driver with lower car insurance rates, as the driver is now quite aware that "big brother" is always watching – and grading – his or her driving habits. This is precisely why the rollout of these devices in the UK, as an example, has not been as widely accepted by the general driver population. Most often it is the high-risk driver that chooses to install these devices, with the promise of substantially lower auto insurance rates if their driving habits are seen as safe and good. Giving up some freedom does have it price. One day this will be the accepted norm for all drivers.
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Published On:January 14, 2013
Print Release:Print Release
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