Auto insurance provider Intact Insurance in Nova Scotia plan to use mobile apps to track driver habits to determine the premium rates in the future. Based on the way one drives, they can be eligible for a 25% savings on their insurance premium!
The idea may sound out of a science fiction movie but the concept has existed for some time. Many companies like Intact Insurance offer a plug in dongles for vehicles which are used to track driver habits. Intact insurance revealed that the dongle program included 350,000 participants from all over the country. It was introduced at N.S in 2014.
However, they are not always the practical solution due to various reasons.
First is the cost that prohibits their universal use and in some cases, the devices are not returned to the company. They can also be lost adding to the cost of the company. Another reason is the dongles track the habits of any driver that gets behind the wheel and it is not possible to distinguish between them.
So, what makes mobile apps the easy way to get the cheapest insurance rates?
Mobile apps have many unique advantages that make them a pragmatic solution for the insurance companies. The app would be using the smart phone of the driver and eliminate any expense on part of the insurance provider. They will also be able to specifically track the habits of the insurance payer which is their priority. It will only monitor the main driver as the app will be linked to his mobile phone.
The tool will be used to track aspects of sudden accelerations, hard braking, night driving utilizing the GPS feature of the phones. Intact Insurance applied for permission to launch the program from the N.S Utility and Review Board which was granted on August 4. The company plans to launch the service next month starting September. The initiative will be a way to reward drivers with good habits and give them lower insurance rates for their performance.
For the time being, the app or the dongle insurance rates are optional in Canada. But according to experts, a day may come when it automatically becomes more preferable considering the costs. With the advance of technology, the companies may increase the cost of the premium and people will opt for the tracking program for affordability.
But not all customers may be willing to join the program. It has been seen that many consumers do not prefer to join such programs. Some also practice bad driving habits like speeding or other dangerous stunts which may impact the insurance rates. There are also some apprehensions about the nature of data collected by the app and its usage by the company. But as the insurance industry is regulated it has not misused the user data under its control.