For anyone who lives in Canada and drives a car, you all know how incredibly expensive auto insurance has become. With premiums continuing to go up every year, it’s time for someone to change the system. Having an idea of what to know about car insurance before you pay for your next policy could save you hundreds of dollars each year.
How Your Rates Are Determined
The insurance business is all about risk assessment. As part of what to know about car insurance, it is important for you to understand this. Insurance companies factor in many things when calculating your rates, including your credit score, age, driving record, sex, location, and more. In most cases, those who are younger or have poor driving records are likely to pay more. But it goes deeper than this. Those with bad driving records not only drive up their own rates but affect the rates of everyone else. Something that many drivers and several insurance companies are starting to take notice of.
Technology to the Rescue
This July, the Canadian Automobile Association (CAA) released a new type of insurance called MyPace to drivers in Ontario. This type of coverage requires you to install a device in your car that tracks the miles you drive and sends the information to the insurance company. The question is whether allowing this to occur puts your privacy at risk. Drivers pay a base policy rate and each time their car reaches the 1,000km point; the driver must pay an additional fee. Once the vehicle has traveled 9, 000km, the driver will be removed from the MyPace program and must purchase standard insurance. The device also sends information such as where your car has been and various information about your vehicle’s health such as why the check engine light comes on.
Will the Data Collected be Secure?
There is, however, a concern that allowing a company to collect this type of “personal” information could present the risk of a data breach that releases your information to someone with evil intent. You could be subject to identity theft or some other monetary loss or even personal injury. The best way to do this, something CAA has already done, is to be as transparent as possible with those who choose to use telematics to help reduce their insurance costs. People need to know exactly what information is being collected, how it will be used, and most importantly of all, how it will be stored.
Finally, the insurance company should consider, is their plans for any “secondary” use of your information. What are their plans should hackers attempt to access the data or if law enforcement shows up on their doorstep with a warrant? The idea is that by identifying the risks up front, the customer is a better position to decide for themselves how much of their privacy they are willing to give up in order to save money on their insurance. Telematics may well be the way of the future for all auto insurance, but for now, it is the latest in what to know about car insurance if you want to save money.