New research indicates that Canadian brokers may not be providing sufficient help to clients who are still 'skeptical' about UBI.
Although telematics and usage based insurance (UBI) devices have been on the Canadian market for years, a new study reveals that many drivers remain skeptical of the technology and base their opinions of it on “erroneous assumptions” and “confusion.”
In fact, even though UBI is designed to save consumers money, only one-half of Canadians believe telematics can lower their auto insurance premiums, and one-third feel it has no benefit to them at all, according to the Allstate Canada research.
Moreover, 26% of Canadians believe that telematics could lead to an increase in premiums, even though that’s never the case.
“There is a clear gap in understanding here as the purpose of a UBI program is to create a personalized insurance premium,” Ryan Michel, senior vice president and chief risk officer at Allstate Insurance Company of Canada, said in a statement. “The fact is, enrollment in a UBI program won’t result in a rate increase.”
Other misconceptions persist as well, particularly in regards to privacy. Despite the fact that all UBI initiatives in Canada must undergo strict regulatory scrutiny to ensure they align with privacy laws, 46% of consumers believe that auto insurers will not keep their data private and 65% worry that their location will be tracked by GPS.
These numbers may be startling for brokers, and reflect a growing need for insurance professionals to educate their clients about UBI products and help them weigh the pros and cons of each auto insurer’s offerings.
“Usage-based insurance programs are relatively new in Canada and with any new technology, there are going to be questions about how it works. We want to help answer those questions and assist Canadians in making the right decisions for them,” says Michel. “
Although there are some potential drawbacks for consumers, such as the fact that telematics can’t differentiate between drivers of a shared car or that some programs actually do track locations, brokers can often help consumers find a UBI program that fits their comfort level.
