Provincial bill could expand usage-based auto insurance

Provincial bill could expand usage-based auto insurance | Insurance Business Canada

Provincial bill could expand usage-based auto insurance

A bill that passed by the Legislative Assembly of Alberta would not only move the province closer to a no-fault auto insurance system, but also expand the use of usage-based auto insurance – a move that has some privacy advocates concerned.

Bill 41 passed the assembly on November 18, with the no-fault rules modelled after a similar system used in Ontario. Apart from requiring insurers to pay insureds for any damage to their vehicles regardless of fault, the bill would also make it easier for insurance companies to monitor drivers’ behaviour through telematics devices.

The new law will allow usage-based insurance “however insurers wish to use it, so long as they can meet the regulatory requirements,” Insurance Bureau of Canada (IBC) Western vice-president Celyeste Power told CBC News.

Power added that Alberta is the first province to announce full use of usage-based insurance through Bill 41.

“And just afterward, Ontario announced that they were sort of getting rid of restrictions around it, as well. In other jurisdictions, it's not available for use in that kind of broad way.”

While Bill 41 would allow insurers to track driving behaviour and reward safer drivers with lower premiums based on the data collected, there are some critics who are concerned that the legislation could eventually lead to larger privacy issues.

Privacy and Access Council of Canada president Sharon Polsky said that the full implications of the bill are not completely understood by Canadians, and that the bill could open the floodgates for similar laws in other provinces.

“This bill should be halted in its tracks,” Polsky told CBC News.

“The Government of Alberta and other governments across the country need to update the access and privacy legislation to meet current needs, to genuinely give us a right of privacy and to put us in control of our information.”

Polsky added that most people do not understand how much of their information if being collected by telematics devices, adding that some smartphone apps that insurance companies use to track drivers in other jurisdictions require users to run the app 24 hours – even when they are sleeping.

“They want all of it monitored so that we can enjoy more affordable rates based on relinquishing our privacy? That is a very, very high price to pay.”

The privacy advocacy leader also believes that privacy laws in Canada are generally outdated or lack the proper regulations to deal with international companies that collect data in Canada, but store the data offshore.