Usage-based insurance could encourage better driving behavior: Study

Study suggests that people respond favorably to economic incentives

Usage-based insurance could encourage better driving behavior: Study

Motor & Fleet

By Lyle Adriano

Researchers at the University of British Columbia (UBC) recently conducted a study on usage-based auto insurance and found that the use of telematics to monitor driver behavior and to help adjust rates could lead to better drivers overall.

The study, which looked at data from 30,000 drivers, suggested that usage-based insurance (UBI) is expected to be used by 142 million by 2023.

UBC marketing professor Charles Weinberg, who is the lead author of the study, shared with CBC other key findings of the report.

“What we found is that women, as compared to men, seem to improve their behaviour more, and younger people as compared to older people, also tend to improve their behaviour more,” Weinberg said.

Weinberg explained that the difference may be because younger individuals could more easily adjust their newly-formed habits or respond better to the economic incentive (of paying less for insurance). He, however, could not give a definitive answer as to why women drivers made greater improvements than their male counterparts.

Usage-based insurance allows drivers to receive immediate feedback on their driving behavior, giving them opportunities to adjust their driving accordingly.

“If your behavior gets better, it gets better over usually the first six to eight weeks and then pretty much stabilizes, so we think that your new driving behaviour then becomes your ingrained or habitual driving behaviour and that’s how you drive afterwards,” commented Weinberg.

The individuals surveyed who volunteered to have a telematic device installed in their vehicles for 26 weeks were eligible for a 5% discount on their insurance, based on their driving.

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