A running theme of 2018 continues to be the impact of technological advances. Car insurance has not been immune to the constantly evolving technological trends, from artificial intelligence (AI) to tracking driver data. If you’re wondering how changes in technology and automation might impact your car insurance, here are three trending topics in the industry today.
- Pay-as-you-go arrives in Ontario
One of the more radical changes to happen in the Canadian insurance industry has been the introduction of a pay-as-you-go insurance plan for Ontario drivers this year. Recently, a Canadian insurance company launched in early July which allows drivers pay for insurance for every 1,000 kilometres that they drive.
On why the company developed the pay as you go program, the President of the company admits the organization was looking to modernize. “Drivers now have access to an insurance option designed to meet the needs of their individual lifestyles and puts choice and control back in their hands,”. The program is tailored for drivers who travel less than 9,000 kilometres a year, such as individuals who use public transportation to get to work and leave their car at home or retirees who like to visit family on weekends. These drivers pose “less risk on the road.”
Those who take part in MyPace will be required to install a telematics device into their car in order to track the vehicle’s mileage. Drivers are billed automatically at every 1,000 kilometres.
- New algorithms are determining rates
Adaptations in technology have also allowed for new data sets to be collected by insurers, changing what information they utilize when determining rates. Traditionally, insurers look at the type of car you drive, your driving record, where you live and your age when creating a personal profile of a driver. Even then, your driving record only details accidents where you are more than 25 per cent at-fault, the length of time you’ve been licensed to drive, whether or not you have taken a driver-training course that your insurance company recognizes and driving convictions.
Now, thanks to new phone-based systems along with a telematics device, insurers are able to analyze more information on the driver. This includes monitoring actions such as distracted driving and following drivers from car to car. The hope within the industry is that access to this data will not only improve risk management, but also work to reduce insurance fraud.
- Self-driving cars
Self-driving technology is now a reality, and more accessible to drivers than ever before. This has certainly been raising questions on how the insurance industry will respond, and those answers will still take some time. However, experts in the field have some theories.
For example, when an accident occurs due to a self-driven vehicle, who is at fault? Many believe the manufacturer will hold the liable. Tesla, Google, Volvo and Mercedes-Benz have already set this precedent with their vehicles. With this in mind, it is expected that insurance premiums will lower with self-driven cars. Experts predict that accident rates will steadily drop over time, especially as more human-operated vehicles leave the road. A drop in premiums goes hand-in-hand with this possibility
What this means for drivers
It can be said that technology is advancing faster than the industry can keep up, so it may take time to see some of the changes proposed. However, the recent introduction of the pay-as-you go model by CAA and the availability of new data prove promising.
