Since the beginning of 2023, Canadian drivers are choosing usage-based insurance (UBI) options more and more often, says the Canadian Underwriter. A trend attributed to the rising cost of car insurance across the country, quotes for UBI are up 18.22% year-over-year.
Late in January, the Alberta government implemented a rate freeze on car insurance premiums, however, the freeze does not apply to Albertans who have had changes in their driving records and habits, such as those who have received a ticket with demerit points, those who have had an at-fault accident, those who have had a change of address, and those who are insuring a new vehicle.
In addition, rate hikes that were approved before the government announcement will continue to apply.
For those who continue to search for ways to lower their car insurance, UBI quotes have been steadily rising since September of last year. In January, they increased 54.64% month-over-month and 36.80% month-over-month in February.
UBI is definitely more popular with the younger demographic, with nearly 55% of car owners aged 20 to 29 opting for a UBI discount (compared to 40% aged 30-39 and 30% of drivers aged 60 and older in January). Interest from male drivers for a UBI quote in the 20-29 age group went up 75% in January and 68% in February. Sixty-five percent of female drivers in the same age group were interested in UBI in January, and 57% in February.
Which companies offer UBI?
Two of the companies we work with as insurance brokers have been offering usage-based insurance for some time now. Intact provides the myDrive program and Aviva provides the Aviva Journey app.
When Intact’s myDrive app is activated, insurance premiums are determined according to three main factors: speed, focus, and smoothness. myDrive provides personalized tips to improve driving habits and rewards to those who consistently display safe driving habits.
Drivers automatically receive a one-time 10% discount when signing up for myDrive. Discounts are then recalculated every six months, and drivers can eventually save up to 25% on their car insurance.
With Aviva Journey, you can prove that you are a low-risk policyholder who deserves a discount for your positive road habits.
The Aviva Journey app measures driving speed, smoothness and control, and attentiveness behind the wheel. Drivers receive an instant 10% discount on their premiums and are eligible for up to a 20% discount on the next renewal.
For both programs, poor driving habits can result in an increase of 5% on car insurance premiums.
Tips to keep your UBI score low
The more mindful you are on the road and the better driving habits you display, the lower your premiums will be with a usage-based insurance package. Tips for driving with UBI include:
- Gradual braking and acceleration: How fast you speed up and slow down is a strong indicator of safe driving habits. Increase and decrease your speed gradually.
- Driving during safer hours: Driving late at night comes with increased risk, particularly between the hours of midnight and 4 a.m. Avoid driving during these hours if possible. Driving during rush hour can also affect UBI discounts, so altering the hours you head to and from work may be advantageous.
- Slow cornering: Cornering at a speed higher than necessary is an indication of careless driving habits. Slow down and take corners at a low speed.
- Attentiveness to speed limits: Your UBI app can track where you are and whether or not you are driving within the posted speed limits. Always pay attention to how fast you are going and stay within the limit.
- Phone use: If you use your phone while driving, your UBI app will be able to tell. Distracted driving causes more than 25% of traffic accidents and is a serious offence according to both law enforcement and car insurance companies.
Practicing defensive driving habits at all times is the best way to get the most out of usage-based insurance. A defensive driver is alert, aware, and always ready to react.
Discuss your car insurance coverage with the experts at Lane’s
If you are looking to lower your car insurance premiums, give the experienced insurance brokers at Lane’s a call at our Calgary, Banff, Edmonton and greater Alberta offices. We are locally owned and operated and work for our fellow Albertans, not for the insurance companies. It is our mandate to help drivers find the very best coverage at the very best rates and to provide customer-oriented, matter-of-fact service so you will always fully understand your coverage and your options.