UBI Programs
The objective of Usage Based Insurance (UBI) programs is to encourage and reward safe driving habits, as well as reduce the frequency and severity of accidents on Alberta roads.
Pay-How-You-Drive
In Alberta, some insurance companies offer drivers the opportunity to earn discounts or rewards based on their driving habits. Think of it as an incentive to be safer behind the wheel.
When a driver opts in, the insurance company starts collecting driving data through either an OBDII device or a mobile application. The driver’s base auto insurance rate may increase or decrease based on factors such as:
- Time of day
- Location driven
- Distance driven
- Speed
- Acceleration speed
- Instances of hard braking
- Mobile phone use
As new insurance companies begin offering this type of program, some may introduce surcharges for unsafe driving behaviour.
Pay-As-You-Drive
Under this program, drivers pay a set rate for coverage based on the vehicle’s use. There may be an initial fee for coverage when the vehicle is not being driven and then a separate fee applied based on a kilometer threshold.
Privacy and Data Collection
While UBI programs do involve the collection of data about your driving behaviour and location, all insurance companies and their service providers are required to comply with Alberta’s privacy laws. Any concerns about the nature of data collected, how it’s stored, and how it’s used should be directed to your insurance company.