Usage-based insurance gaining popularity as traditional premiums rise

Demand for usage-based auto insurance (UBI) in Canada has increased by almost 20% as premiums continue to rise, according to new data from RATESDOTCA.

The comparison website recently reported that quotes for UBI have risen since September 2022, only slightly slowing in the last month.

In January, RATESDOTCA saw UBI quotes shoot up 18.22% compared to the same period last year, with a 54.64% month-on-month increase in drivers opting for a UBI discount.

What is usage-based auto insurance?

Telematics is a technology that monitors a driver’s behaviour and helps to accurately measure driving risk and vehicle usage. UBI programs leverage this data to determine the driver’s risk profile and to calculate a more accurate premium.

“Policyholders have the choice to opt for telematics-based insurance programs,” said Brian Halk, vice president of global marketing at Insurance & Mobility Solutions (IMS), as cited by RATESDOTCA. “And exchange their driving data for more accurate insurance premium pricing.”