Auto Insurance Game Changer

Auto insurance poison
If this looks familiar,
don’t bother reading this post.

A recently-introduced plan may revolutionize auto insurance in Canada. As is the case with many things, this technology has been around for some time in the USA, but it’s new north of the 49th.

Desjardins Insurance is introducing a technology called “Ajusto” as a way for good drivers to lower their auto insurance costs. Ajusto is a piece of hardware that plugs in to your vehicle’s OBD port. From there, it can monitor your vehicle’s use. If, in the company’s judgement, you are a safe driver, your insurance rates will be lowered accordingly. The reduction apparently doesn’t kick in until the second year, because they need a full year to determine just how safe you really are. If you are judged to be a safe driver, the savings can be significant.

Here’s the skinny:

  • you can lower your insurance costs by up to 25%
  • the factors considered to determine who is a safe driver are: your mileage, your acceleration and hard breaking, and the time of day you drive
  • drivers can view their “scores” online, and may choose to change their driving habits accordingly
  • this is a proven technology; it has been in use in Europe and the USA for some time
  • the device itself is free
  • drivers get a 5% discount the first year they use the device; subsequent discounts are based on your driving habits
  • the discounts are a one-way street; if you’re a terrible driver, your rates will not be raised because of use of this device. In theory, you can only win if you try this.
  • initially, Ajusto will only be available in Ontario and Quebec
  • more information available on the Desjardins website.

But then again…

At first blush, this seems like a great way to allow good drivers with no accidents (like me) stop paying for aggressive yahoos who make the streets dangerous for the rest of us. There are a few points to consider, though:

  • I could not find any information as to what the threshold levels are. How much hard breaking is too much? How many kilometres are too many? In theory, the proverbial bars could be set at such ridiculous levels that they are unobtainable. If you drive less than 15,000 km per year, you qualify for a 10% reduction. Sudden acceleration and hard braking are defined as: accelerating faster than 13 km/h in 1 second or decelerating 15 km/h or over in 1 second. In terms of risk due to time of day, Sat­ur­day and Sun­day are con­sid­ered Low risk all day. Mon­day to Fri­day are as follows: 12 a.m. to 5 a.m. High, 5:01 a.m. to 7 a.m. Low, 7:01 a.m. to 9 a.m. Mod­er­ate, 9:01 a.m. to 4 p.m. Low, 4:01 p.m. to 6 p.m. Mod­er­ate, 6:01 p.m. to 10 p.m. Low, 10:01 p.m. to 11:59 p.m. Moderate.
  • Most people probably aren’t going to change jobs or the time of day they drive to work just to lower their insurance costs. Since mileage and time of day  are two of the three factors considered, your potential savings may be very limited indeed.

How realistic are these standards? Depends on each driver, I guess. The safest driver in the world may have trouble lowering his auto insurance rates with this plan, depending on where he lives and when he works. As such, I fear that this could be nothing more than a marketing ploy. Colour me cynical, but the insurance companies are making lots of easy money on the backs of good drivers, so I find it hard to see why they would think this was to their benefit. Yes, it might bring Desjardins new auto insurance customers initially, but I’m sure this technology will become more common, and when it does, it will no longer be a competitive advantage, and so the insurers will be left with customers paying less than they did previously, which obviously isn’t a good idea for them.

That having been said, I will definitely keep an eye on this. I’m certainly no early-adopter, so I’m in no rush at this point, but if this turns out to be a viable way to lower my auto insurance, I may be ready to sign up in a few years. As a (formerly) young man, I was punished by the insurers for the crime of being male when I first got my driver’s licence. I would like to think that there is justice in the world, and that I will someday be able to use my good driving record to earn that money back.

Failing that, I can just continue to use my car only on weekends, and to take the bus to work.

2 thoughts on “Auto Insurance Game Changer”

    1. Hm. Good question. I poked around a bit more and found this information. The level of risk (as determined by Desjardins) is as follows: Saturday and Sunday are considered Low risk all day. Monday to Friday gets more complicated. 12 a.m. to 5 a.m. High, 5:01 a.m. to 7 a.m. Low, 7:01 a.m. to 9 a.m. Moderate, 9:01 a.m. to 4 p.m. Low, 4:01 p.m. to 6 p.m. Moderate, 6:01 p.m. to 10 p.m. Low, 10:01 p.m. to 11:59 p.m. Moderate.

      Remember these two points:
      1) This information will only be used to lower your rates. If you don’t qualify for any savings because of your driving habits, your premiums will not be affected. (So they say)
      2) If you aren’t comfortable with this, remember that at this point, it is only being offered by one insurer, Desjardins. I would not be surprised if more companies adopted this technology in the future but at this time, if you’re not with Desjardins, this is a non-issue.

      I agree with your comment about tailgaters wholeheartedly.

Leave a Reply

Your email address will not be published. Required fields are marked *