Like the weather, sky-high car insurance premiums are something everybody talks about but nobody seems to do anything about.
Now somebody is. Last month, Scarborough, Ont.-based Aviva Canada began signing up the first of a projected 5,000 Ontario drivers for a pilot project.
Its ultimate aim, says senior marketing vice-president Paul Fletcher, "is to give consumers more control and more influence over how much they pay for their car insurance."
The project is aimed at the segments of insured drivers who routinely pay the highest premiums - based solely on statistical assumptions about them, not their personal driving records - who could potentially see discounts of up to 25 per cent. Premiums also could drop for vehicles that are seldom driven.
Until now, the technology did not exist to allow insurance to be priced based on how a particular car is actually driven. Aviva's new Autograph technology solves that with a computer chip that records the speeds at which a car is driven, the distances covered and the time of day it is driven.
Fletcher says these three elements increase the probability of accidents resulting in serious injuries to drivers and damage to their vehicles.
About the size of a matchbox, the device containing the chip will be supplied free by Aviva and is easily connected to ports on or near the steering columns of almost all cars sold in North America since 1996. These ports are currently used by mechanics and by Ontario's Drive Clean examiners to measure a vehicle's engine efficiency.
Reporting the information recorded on the Autograph chip will be done at intervals of the driver's choosing. Fletcher says the device containing the chip can be removed easily from the car. Using a cable and software that is included in the package, the data can be uploaded from a computer to Aviva's website for analysis.
If it is determined that the car in question was driven at slower speeds, during times when accidents are less likely to occur and for shorter distances than were calculated when the insured driver's policy was calculated, subsequent premiums may be reduced by up to 25 per cent. Additionally, there is an automatic five-per-cent discount for everyone who gives Autograph a try.
The most obvious beneficiaries of what might be called a financial meritocracy will be young males, whose premiums are often up to three times higher than those paid by older drivers. But the monitor chips also have the potential to reduce insurance premiums charged to senior citizens and to two-car households, who will now have a way of proving that their cars are driven very little.
Beyond the potential monetary reward for drivers willing to report their driving behaviour to their insurer, Aviva believes there is another benefit in its Autograph technology.
"We conducted some pretty extensive research ... and found that - though this is clearly not for everyone - virtually every driving household could benefit from examining and discussing how and when they drive their vehicles," Fletcher says.
"For example, if a teenager is just beginning to drive the family car, or a second car, this tool may prompt some constructive discussions in the household around how everybody in the family should be driving."
What's not to like about Aviva's new program? It depends on how drivers feel about their privacy.
Fletcher says Aviva's research determined that the majority of Canadian drivers are unlikely to balk at disclosing their driving habits. "But we know and respect that not everyone will feel comfortable in sharing this information."
A Big Brother element that could have been added to the Autograph technology, but was decided against, is global positioning system (GPS).
Aviva's companion company, Norwich Union, is testing a similar program in the United Kingdom that does include monitoring where cars are driven.
"But we don't believe Canadian consumers want that kind of data collected about them," Fletcher says.
A cross-Canada rollout of the Autograph program is being contemplated and may begin some time next year.
Fletcher says doing so will depend on the results of the Ontario pilot project plus "whether we can make a convincing case to the provincial insurance regulators that justifies allowing this type of discount."
"We are convinced that there is a lot of value in this. But at the end of the day, the data (from the pilot) has to do the talking," Fletcher says. "It has to tell us what we're all hoping to hear - that there is a way for customers to control their insurance costs and that there is sufficient interest in doing so."
