Some valid points on credit score, usage-based insurance and telematics devices earned one broker top spot for Top Comment.
Commenting on the article,
‘Should Canada revisit credit rating for auto underwriting?’ Greg Shields wrote that the advance of technology and improved fraud detection will contribute to more fair premiums, and better drivers.
“Credit score and most other rating criteria are indirect indicators of loss. As technology and communication improves hopefully we will reach a FAIR rating scheme, and identify primary direct indicator of loss, actual driving behaviour. Current UBI or telematics do not collect enough detail, and still only provide indirect rating information, but when real time diving behaviour is measured, then we will have fair premiums.
“People who drive in rush hour traffic every day should pay considerably more than people who take transit. But most factors will be completely optional on the part of the drive. Drivers who demonstrate aggressive braking, acceleration and lane changes, while exceeding posted speed, traffic speed and speed appropriate for the conditions, can't afford an appropriate premium and will need to change their behaviours or be priced out of the market.
“The other issue is fraud, and the industry is working (slowly) on improved fraud detection and enforcement. Both initiatives can become a reality sooner with more government support. There is not enough incentive for insurers, because they like consistent measurable premiums, and they rely on charging good drivers too much, and bad drivers not enough. (continued.)
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“Improved behaviour will mean that premiums will go down profit margins and profit will go down. But they are ignoring the fact that Losses will also go down and that means fewer deaths and injuries; FEWER DESTROYED FAMILIES.“
To see the original article, click
here.
