Usage-based insurance (UBI) in Alberta has become one of the industry’s hottest topics, thanks in large part to the emergence of telematics. The Canadian insurance industry has begun to incorporate telematics technologies, which allows insurers to collect and analyze advanced data regarding vehicle usage from devices in the vehicle’s engine. This, in turn, allows insurance companies to offer flexible, money-saving products such as usage-based auto insurance.
How UBI Differs from Conventional Coverage
Conventional auto insurance policies charge a single, rigid premium, payable monthly, quarterly, semi-annually, or annually. This premium remains the same regardless of how you actually use the vehicle (or vehicles). Whether you speed and drive recklessly or obey all traffic laws and drive safely, your insurance rates will not change much unless you file a claim, get in an accident, accumulate traffic tickets, or are convicted of a crime under the Highway Traffic Act. The only exception is that you might be rewarded with slightly reduced premiums after several years of incident-free driving.
Usage-based coverage leverages telematics to help insurance companies better assess the actual degree of risk you pose. Telematics track driving habits such as speed, cornering, braking force and frequency, and other key indicators of your approach to driving. This data allows insurers to offer more immediate and more valuable discounts to clients who consistently show that they operate their vehicles safely and responsibly.
Practical Benefits for Commercial Clients and Fleet Owners
Fleet owners are always looking for ways to cut costs and save money without exposing themselves to undue insurance risks. Of all the available options on the market, telematics offers some of the best money-saving potential. Here’s why:
- It allows business owners and commercial fleet managers to track the driving habits of employees, helping them assess and reduce risk
- It gives business owners and fleet managers important insights into vehicle expense accruals (related to fuel consumption, vehicle maintenance and repair, etc.)
- It is capable of determining whether a particular vehicle has been unused for an extended period of time, and adjust that vehicle’s coverage accordingly
One other aspect of telematics that’s worth mentioning in this context is that it can also reward “green” driving practices. Green driving aims to reduce idle time, avoid excess fuel consumption by observing speed limits and reduce waste by properly maintaining the vehicle. In essence, green driving leads to safer driving, and that can vastly improve your bottom line when it comes to telematics applications.
More Ways to Lower Commercial Fleet Insurance Costs
Beyond adopting telematics, there are many other strategies business owners and commercial fleet managers can use to help reduce costs and keep expenses under control. Here are some practical examples:
- Raise the policy’s deductibles to generate lower monthly or annual premiums
- Reduce the policy’s coverage limit to relieve the financial burden on the insurance company in the event of a major incident or accident
- See if your insurance company offers any discounts to multiple policy holders; for example, your insurance provider might extend a deal on your commercial auto insurance if the company’s business or property insurance was obtained through the same provider
- Ask about loyalty programs and discounts that are only available to long-term clients (if you’ve been with the same insurance company for five years or more); these aren’t always advertised or automatically offered to qualified policy holders
- Reduce risk by ensuring that vehicles are always stored at a secure location when not in use, employing only drivers with clean driving records, and providing driver education and training programs to all company members who operate vehicles
Get More from Lane’s Insurance
Lane’s Insurance is a leading Alberta-based brokerage, offering highly competitive rates on commercial auto insurance and all your other insurance needs. Because Lane’s is a brokerage, we can get insurance companies bidding on your business, which helps you secure the best rates. In addition, Lane’s Insurance delivers outstanding customer service and claims support that’s second to none in the Canadian insurance industry.
To learn more about our commercial insurance products, please visit Lane’s Insurance today!