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View Poll Results: Would you install a telematics device in your car?
YES 2 12.50%
NO 14 87.50%
Multiple Choice Poll. Voters: 16. You may not vote on this poll

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Old 07-17-2014, 03:33 PM   #1
hockeyfan27
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Telematics & Auto Insurance



A few months ago there was a brief discussion about telematics where I promised more information once it was forthcoming from the insurance companies I partner with. for reference

If you haven't heard the term "telematics" before: telematics, specifically with respect to auto insurance, is the monitoring of vehicle data provided by your onboard computer via a cellular network for the purpose of premium calculation. This technology is not that new, it has been employed for years by many industries to manage vehicle fleets. (Trucking, rental car, etc.)

A small device is plugged into the service port of your car which collects information about your driving habits and transmits this data to the insurance company. (often facilitated by a 3rd party to the insurance company)

There is a government body responsible for the regulation of the provinces insurance industry: the Financial Services Commission of Ontario (aka: FSCO) If you've read any of my other posts about insurance, (FYI: I am an insurance broker) chances are you heard me mention them before. They set the rules that all insurance companies must abide by, approve any rate changes, and will determine how this technology is utilized now and in the future.

Below is an excerpt from they bulletin they posted in October 2013 on how this information is to be used. The whole Usage Based Insurance Pricing bulletin
"Usage Based Insurance Pricing (UBIP) programs, including program-provided devices and applications, should collect and use UBIP data solely for discount-setting purposes, and not to decline, cancel or refuse to renew risks or to confirm rating criteria currently used (e.g., where vehicle is principally garaged, distance driven, pleasure/commute/business use). Additionally, it would be inappropriate for insurers to use UBIP data for claims-related purposes at this time."
Intact is the largest auto insurer in Canada. They have recently concluded their pilot project with telematics and have now opened it up for main stream use. They came in to my office yesterday to explain the ins and outs of their plan.

In brief:

If you sign up for Intact's "My Driving Discount" program (available to current or new customers) you are sent a free telematics device to self-install. For opting into the program you receive an instant 5% discount off your premium. You are provided a website login to monitor the data collected which is first posted after 30 days of having the device installed and you will also receive emails to keep you informed. You can earn up to 25% off your premium with good driving habits. You will only receive this discount on the up coming renewal and it must be a minimum of 180 days after the device is installed (so they can collect enough data to calculate the proper discount)

They will be monitoring 3 data points: Hard braking, Rapid accelleration, time of day use. (they will also note when the device is disconnected)

What counts against you:
Hard braking = any decrease in speed of more than 12 km/h in 1 second
Rapid acceleration = any increase in speed of more than 12 km/h in 1 second
Time of day = driving between 12 am and 4 am (I know, it's not fair to shift workers, but when has insurance ever been fair?)
They are looking for trends, so you won't be penalized for standing your car on its nose to avoid an accident. However, if you do it 3 times a day on your commute to work, you will not be receiving the maximum discount. Each "strike" against you is logged for your review on the website interface. A trend of improving driving habits will add to your discount earned.

This program will definitely not result in a 25% discount, but regardless of the data collected you are guaranteed 5%.

It is a very interesting concept that specifically addresses the common complaint "I'm a good driver and I'm paying too much for insurance". Now you have the opportunity to prove it and benefit from your good habits.


I'm sure this will raise a few questions so please post up your thoughts and concerns. I will do my best to answer what I know and research what I don't.

Thanks for reading, I hope you found it useful! please participate in the poll.
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Old 07-17-2014, 03:50 PM   #2
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Can too many points make your premiums go up??

I work for a large natural gas utility and these were installed in all of our fleet vehicles. Ours are equiped with a beeper so every time you have a strike it beeps at you. What we are finding is these devices are junk....hit a pot hole "beep" go up a steep driveway "beep" change lanes to fast "beep"...you get the idea. I don't know if these things can be calibrated or not but the ones we have are wayyyyyy to sensitive.
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Old 07-17-2014, 03:59 PM   #3
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Currently the technology is only allowed to develop a discount.

The worst case scenario is that you get no additional discount for your driving habits but even then, with Intact, you would get the 5% enrollment discount.
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Old 07-17-2014, 05:03 PM   #4
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Good idea in principle, my parents have this installed in their car (been about 2 years now). In my brief foray into finding out more, it appears that the insurance premiums offered by the company providing that system (in their case, state farm) were 5% higher than that of the competition anyways, making the notion of a discount a bit illusory. I don't think it gave them that much anyways.

I can imagine that it would work better if every insurer had it. For me, however, it's an outright no. Much as I like to save money, having a device tracking the usage and driving patterns of my car is a) a breach of my privacy and b) a security concern. I realise it is a voluntary program (for now, at least), and participants enroll of their own volition, but as it becomes more widespread, I can foresee a shadow industry dedicated to obtaining the information created and using it for nefarious purposes (know when you're gone, go rob your house).
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Old 07-17-2014, 06:26 PM   #5
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I don't see KM tracking listed, wouldn't they be tracking that also? Or is it not used to track KM?

Also about detecting disconnections, I wonder what happens if you leave it in all the time but then one day disconnect it and goto the track/buck wild. I wonder what would happen? I guess no discount for that month?
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Old 07-18-2014, 12:19 AM   #6
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Quote:
Originally Posted by TSI View Post
Good idea in principle, my parents have this installed in their car (been about 2 years now). In my brief foray into finding out more, it appears that the insurance premiums offered by the company providing that system (in their case, state farm) were 5% higher than that of the competition anyways, making the notion of a discount a bit illusory. I don't think it gave them that much anyways.

I can imagine that it would work better if every insurer had it. For me, however, it's an outright no. Much as I like to save money, having a device tracking the usage and driving patterns of my car is a) a breach of my privacy and b) a security concern. I realise it is a voluntary program (for now, at least), and participants enroll of their own volition, but as it becomes more widespread, I can foresee a shadow industry dedicated to obtaining the information created and using it for nefarious purposes (know when you're gone, go rob your house).
I think the industry is VERY aware that this, your point a, will be the common opinion and their biggest hurdle to this programs success.

In one of the pilot brokerages the primary demographic were drivers 50+yrs old. There was only 1 customer who elected to participate. However drivers who are now just getting their 1st car, not old fogies like me who can remember life before the internet was commonplace, are much more comfortable with the extent technology monitors them. The first time I realized google was targeting me with the ads they were showing was a bit unsettling. This new wave of drivers has never known anything else. Apparently 1/3 of Intact's new customers are opting into this plan.

I'm less concerned about the risk of the data being used by criminals, or I should say no more so then I am worried about my cellphone being hacked (which has very similar data available on it). This is also a cellular based device and from what I've been told the data is uploaded in chunks after the fact, not in live time.

Quote:
Originally Posted by T.Dot_E30 View Post
I don't see KM tracking listed, wouldn't they be tracking that also? Or is it not used to track KM?

Also about detecting disconnections, I wonder what happens if you leave it in all the time but then one day disconnect it and goto the track/buck wild. I wonder what would happen? I guess no discount for that month?
Currently they can't even use the data to verify if the car is used for commuting or not. These devices are capable of collecting essentially everything your OBC monitors but the insurance company is currently not allowed to utilize it. I'm sure as time progress there will be more and more data made available. I can imagine at some point in the future, how loud you have the radio or how often you use your factory equipped bluetooth to make/take calls will factor in somewhere.

I don't know enough about the electrical system of a car or the circuity of the telematics device to know how it knows of a disconnect. If a car equipped with this device is not on the road for an extended duration of time the company will send a notice to the broker to follow up. I don't know how it can tell the difference between a weekend where the car isn't used vs a weekend where the device is disconnected. Though a simple KM calculation would yield a clear answer, I don't know if that data is available to them.

I do know that insurance companies are still trapped by the current confines of the existing insurance legislation. SO if you disconnect the device, it won't be "no discount this month". Your premium cannot be adjusted until the renewal date. (there are exceptions to this but generally they favour the client - ie: adding a graduated licence discount is often done mid term) They would look for a trend in the disconnects and if found, you would likely not earn much of/ if any discount on your following renewal.
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Old 07-18-2014, 12:42 AM   #7
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Great! One more tacking device! lol Wouldn't do this if they promise 90% off!!!
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Old 07-19-2014, 12:13 PM   #8
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Yeah, this device or any like it, will never be installed in my car. Kthxbye.
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Old 07-19-2014, 08:14 PM   #9
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Am i the only one who thinks this is BS!?? Lets see; the insurance industry will invest milions in this new thechnology JUST so little old me can save a bit of $$$!!!? If we only assume they don't do anything for free, where is the profit coming from!!!? If you can ONLY save, and the technology costs $$$, how will this benefit them!? Unless they use it to deny claims, raise rates, or drop coverage for high risk clients, this does not make ONE bit of sense!
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Old 07-20-2014, 12:02 AM   #10
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Am i the only one who thinks this is BS!?? Lets see; the insurance industry will invest milions in this new thechnology JUST so little old me can save a bit of $$$!!!? If we only assume they don't do anything for free, where is the profit coming from!!!? If you can ONLY save, and the technology costs $$$, how will this benefit them!? Unless they use it to deny claims, raise rates, or drop coverage for high risk clients, this does not make ONE bit of sense!
Ding ding ding ... we have a winner. I can certainly see ass raping everywhere in a few years ... oh you don't want the device? Facility for you! They'll find loop holes in the governance to stuff this down our throats for sure.
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Old 07-20-2014, 07:46 AM   #11
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I think it's gonna be simple. Rates will go up, PERIOD.

Installing this device is your opportunity to prove you are an exception to the rule.
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Old 07-20-2014, 10:09 AM   #12
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I don't know enough about the electrical system of a car or the circuity of the telematics device to know how it knows of a disconnect. If a car equipped with this device is not on the road for an extended duration of time the company will send a notice to the broker to follow up. I don't know how it can tell the difference between a weekend where the car isn't used vs a weekend where the device is disconnected. Though a simple KM calculation would yield a clear answer, I don't know if that data is available to them.
If they are just plugging into the OBD2 port then all they can see are the predetermined OBD signals coming across the vehicles OBD CAN channel. There aren't a lot of signals that get broadcast on this network. If you want to look them up I beleive the SAE standard is J1979 for light duty and passenger cars and J1939 for commercial vehicles.

My question is what if your car is older then 1996 and is equipped with OBD1. These scan tools dont work the same way as the OBD2 tools, do they have a transmitter for each?

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Old 07-20-2014, 11:55 AM   #13
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I'm still waiting for the so called 15% premium discount the gov't promised which appears to be offset by insurance companies raising their prices anyways. I'm sure my insurance company will give me a 5% premium discount (without telematics) just to stay with them if I told them I may be switching to a competitor.

There's never a free lunch.
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Old 07-21-2014, 10:50 AM   #14
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Originally Posted by Eurostyle View Post
Am i the only one who thinks this is BS!?? Lets see; the insurance industry will invest milions in this new thechnology JUST so little old me can save a bit of $$$!!!? If we only assume they don't do anything for free, where is the profit coming from!!!? If you can ONLY save, and the technology costs $$$, how will this benefit them!? Unless they use it to deny claims, raise rates, or drop coverage for high risk clients, this does not make ONE bit of sense!
I don't believe any company is developing this tech themselves so their cost to implement the program is not astronomical however, I see your point. Fact is, insurance in Ontario is still a consumer driven product and there is a lot of competition. The rational is that a device like this will encourage "better" driving therefore reducing claims, especially with younger drivers; this is the worst demographic for serious claims.
Also, offering a customer some control over their premium will help retain that customer. It is cheaper to keep an existing customer than obtain a new one.
The timing of this program's introduction is not a coincidence. This is a part of Intact meeting the mandated premium decrease for this year.

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Ding ding ding ... we have a winner. I can certainly see ass raping everywhere in a few years ... oh you don't want the device? Facility for you! They'll find loop holes in the governance to stuff this down our throats for sure.
I don't see that happening for the simple reason that there are insurance companies (ie: the smaller mutual companies and co-ops) that won't/can't implement technology like this. If the device and its result is not well received customers will flock to companies that don't utilize it or leave it as an optional program.

Quote:
Originally Posted by nate_s89 View Post
If they are just plugging into the OBD2 port then all they can see are the predetermined OBD signals coming across the vehicles OBD CAN channel. There aren't a lot of signals that get broadcast on this network. If you want to look them up I beleive the SAE standard is J1979 for light duty and passenger cars and J1939 for commercial vehicles.

My question is what if your car is older then 1996 and is equipped with OBD1. These scan tools dont work the same way as the OBD2 tools, do they have a transmitter for each?
I don't think you'd qualify for the program. As far as I know only its only for OBD2 vehicles. (at least through Intact).

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I'm still waiting for the so called 15% premium discount the gov't promised which appears to be offset by insurance companies raising their prices anyways. I'm sure my insurance company will give me a 5% premium discount (without telematics) just to stay with them if I told them I may be switching to a competitor.

There's never a free lunch.
Don't hold your breath, in the top post I linked the thread where we discussed that decrease. The way insurance works in Ontario is that once the rate is filed with FSCO that is the rate they charge you. You can threaten to leave, you can cry, you can camp out in their building lobby, it won't make a difference. I couldn't change the rate $1 for my 90 year old grandma. I don't think any company has had an increase approved, but they are certainly creative in how and where they apply the reductions.
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Old 07-22-2014, 01:26 AM   #15
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I think this is a bunch of nonsense and even if they paid me, I still wouldn't install it in my car! Just because it measures 3 different values, those specific values do not dictate if you're a good driver. The owner of the device could be driving double the speed limit, tailgate, drive without a seat belt, be under the influence, drive on the opposite side of the road, etc. And it gives the drivers three strikes per day, well what if that said driver has a daily commute of 100-200km per day highway driving. They're either merging onto the highway or passing other motorists. Not sure how everyone else drive, but I don't like to take my time passing someone or be under the highway speed limit when merging onto the highway. Or taking into consideration the hard braking, what if someone cut in front of you or maybe an animal jumped out. I used to commute 350km/day and there was definitely a significant amount of situations where it could easily grab marks against one's record each day. Next thing the driver that has this device will find their premium increase because the insurance company has found an excuse to classify them as a "high risk".
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