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In 2016, I wrote about the increasing adoption of telematics by auto insurance companies. I called them squeal boxes. Nearly a decade ago now, AllState Insurance in the U.S. introduced the idea: let us install a black box in your car, and it reports back on acceleration, braking, cornering, speed, and where and when you drive. Do all that to our liking, and we’ll give you a deduction on your rate. “But will you increase my rates if I don’t hit those marks?” some asked. “Of course not!” they all replied. And many opted in to have their privacy invaded.
Insurance companies are not charities. Insurance companies cover payout claims and make profits. If they don’t, they raise rates so they do. If they’re giving “Customer Nothing to Hide” a break on rates, they’re going to have to make that money back on “Customer I Don’t Want You Tracking Me”. To not understand that this would be the outcome when it started was to be willfully ignorant.
Financial Services Regulatory Authority of Ontario (FSRA) announced in November of last year that Ontario insurers would be allowed to use Usage Based Information (UBI)—gleaned from those squeal boxes—to reward and punish drivers. Quebec already does it. Alberta followed suit in December, opening the gate for insurers to require drivers to adopt UBI. It’ll be a domino effect across the industry. I’m aware everything we drive already has a black box in it that can trace all of this information, but until now, that information was only useful after a crash or to make a diagnostic determination. Your mechanic may know you drive like an idiot, but they aren’t going to call your insurance company to tell them.
Traditionally, insurance rates punish based on stats: young men pay more because statistically young men are the riskiest drivers and do the most damage to property, other drivers, and themselves. Seems fair that if I’m a 22-year-old guy I should have a chance to prove I’m better than that and subsequently pay less.
Until now, you had little to lose. Those snapping up boxes on their cars in exchange for their privacy, all while exclaiming one of the most deadly phrases too many seem to love—“if you’re doing nothing wrong, you have nothing to hide”—will have the tables turned. And the rest of us will be forced into it as company after company will make it a requirement of coverage. All in the name of safety.
Could it help?
If every move is tracked, I’m far less likely to speed. Maybe I’ll go a little under the speed limit just for good measure, or if I’m not sure what the limit is. Protecting my rating will be top of mind. Speed is one of the top three factors in deadly crashes, along with distracted and impaired. If we eliminate speeding, we’d eliminate one of the highest costs to our society. Sounds good. Until you get to physics.
The difference in the speeds of various vehicles can be deadly, which is why our Highway Traffic Act refers to “the flow of traffic” while artfully avoiding at what speed officers are likely to charge you. Ontario last year raised the limits on some GTA stretches because nobody obeyed them anyway. Until everyone is driving like a zombie terrified of paying higher insurance, there will be a mismatch of speeds. By all means, take out the high speeders, who should be demonized. But anyone who drives on the 401 knows that driving the limit is almost impossible. I do not advocate speeding; I do advocate a safe flow of traffic.
The only thing that will strictly regulate speeds on our roadways is autonomous cars. You have to remove the driver from the equation entirely, and we’re not close to that.
We already declare our anticipated mileage to insurance companies. A UBI tracks it precisely. I barely drove my car in the past year, and I got 60 whole dollars back from my insurance company. The past month, my kid has been sick and I’ve driven more every day than I did most of last year. If I had a UBI app, would my rates now go up for this temporary rise? For how long?
Many of us have more than one driver insured on our cars. I sure know the rise in rates couldn’t have been my fault. How will the companies be breaking down what information they’re using, and to what granular level? Remember: in the very near future, this won’t be something you can opt out of. Same goes for when and where you drive. Tracking devices used to be the territory of stalkers and jealous spouses.
UBI could be helpful for distracted driving because it tracks when you touch your phone. However, “UBI systems typically require a specialized smartphone app to be running at all times, including when the smartphone’s owner is asleep,” from the Alberta report. Read that again: you will be tracked at all times.
I know I’m howling into the wind, but this is so wrong. And we’re just letting it happen.