Why You Should Enroll in a Use-Based Insurance Program

If you’re looking to find ways to reduce the cost of your auto insurance premiums, you may want to consider enrolling in a usage-based insurance (UBI) program.

There are 2 types of UBI programs available in Canada, commonly known as pay-as-you-go and pay-as-you-drive. Each offers drivers the opportunity to pay less for auto insurance, and both types provide registration discounts varying from 5% to 10% immediately.

Based on telematics technology – a technique of monitoring and gathering information from vehicles consisting of place, driver behavior and tasks – UBI is designed to advertise great driving practices and give drivers more control over their insurance prices by reducing costs for drivers with safe driving practices and those who drive fewer kilometers each year. Insurance Business Canada noted the global UBI market is expected to reach US$77.25 billion by 2026, as more drivers sign up for the program.

And there seems to be a desire to react to the growing level of consumer passion in technology, especially in Ontario. In the in-between phase of the 2020 budget, the provincial federal government signaled it would allow insurance providers through the Monetary Solutions Regulatory Authority (FSRA) to quickly bring in consumer-focused goods to help drivers control their costs as part of its dedication to fully developing auto insurance systems. electronic.

“[The] budget removes barriers for insurance providers dedicated to offering innovative items that customers are familiar with receiving from a variety of other industries,” said Kim Donaldson, vice president of the Canadian Bureau of Insurance in Ontario, in a declaration. “In addition, the budget promotes development by enabling insurance providers to bring new items to market that help drivers control their costs, while also acknowledging the growing demand for fully electronic experiences and removing limitations on usage-based insurance items.”

Pay as you use or pay as you drive?

Pay-as-you-go insurance keeps track of how many kilometers you have. For the circumstances, CAA’s MyPace program is designed for riders who have significantly less than 9,000 kilometers per year. With MyPace, drivers download and install an app to their phone, and install a USB telematics device in their car. They were billed for how much they had. There is a base rate for coverage when the vehicle is not in use and another charge used for every 1,000 kilometers driven. Kilometers are recharged immediately in 1,000-kilometer increments in the CAA pay-as-you-go model.

Why You Should Enroll in a Use-Based Insurance Program

Paid driving insurance tracks driving behavior. Insurance providers such as Undamaged, Desjardins, Allstate, and Pembridge all offer pay-as-you-go programs via mobile apps. This type of UBI program offers drivers the opportunity to save 25% to 30% of their costs by monitoring how secure they are. They monitor points like your average speed, distance traveled, where the vehicle is and how efficiently you accelerate and brake.

Whether you own a rare or a cautious driver, one of the options offers the potential to lower your insurance costs. However, starting November 2020 in Ontario, the Monetary Solutions Regulatory Authority (FSRA) will allow insurance providers whose UBI program monitors driving behavior to impose additional fees on motorists who exhibit high-risk driving behavior.

How else can you lower your premium?

Enrolling in the UBI program may not appeal to you. So, what are some other ways you can reduce your premiums? After adhering to the speed limit and driving defensively, here are some ideas:

  • Bundle your car and house packages. Most insurance providers will deduct a portion of your overall insurance costs if you purchase car and home or condo insurance from them.
  • Get winter tires. No matter where you live in Canada, it’s a smart idea to have winter tires installed on your vehicle from November through April. Many insurance providers will give you a 5% discount for actually having it in your car.
  • Install anti-theft device. Most modern vehicles are equipped with anti-theft systems, as well as some driver assistance technologies. Many insurance providers will provide a discount if your vehicle has this feature. If not, consider installing an anti-theft device recognized by your insurance provider.
  • Pay your premium every year. If you can do it, pay your premium in full on the go. Many insurance providers charge a small fee to arrange resettlement each month.

Also, do a quick comparison between costs and plans to see if you can save money by turning to an auto insurance company. It never hurts to explore your options. Give it a try! You may find what you are looking for in a few clicks.

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