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Usage-Based Insurance Can Save You Money, but 81% of Canadians Have Yet to Try It

Looking to discount your auto insurance premium? Compare quotes with us from Canada's top UBI providers to find your lowest rate today.

Usage-based insurance (UBI) – sometimes referred to as pay-as-you-drive or pay-how-you-drive – has been around for nearly nine years in Canada. However, according to our recent survey, polling over 1,300 Canadians with auto insurance, 81% have yet to try it. Why?

Fifty-seven per cent of Canadians know about usage-based insurance, and of those, 59% see the value in these types of programs. 

If the pandemic is teaching us anything (beyond the value of medical science), it’s that earning more, spending less, and investing the rest are all paramount to our financial well-being. 

So, why are Canadians leaving money on the table?

Does usage-based insurance mean rate hikes?

The survey reports concerns from 77% of Canadians about potential rate hikes, less so the allure of discounts. Another 51% are hesitant in case it negatively affects their current rates. 

In 2016, Ontario’s regulatory body stipulated there would be no rate hikes or premium increases. However, in November 2020, the Financial Services Regulatory Authority of Ontario (FSRA) said they “need to be responsive to the evolving needs of drivers and removing regulatory barriers for usage-based insurance is one example.” Essentially, they are allowing insurers to surcharge drivers for risky behaviours. 

Unsurprisingly, according to Google, interest for usage-based insurance spiked right after the pandemic first hit when people were driving less and looking for any discounts – from car insurance to deferring mortgages. The next peak was in April of 2021 when the surcharge information made its way onto national news. 


FSRA says they removed the original UBI guidance “to promote and enable the introduction of more flexible and innovative usage-based insurance.” You can choose insurers with more dynamic pricing, and insurance companies can be more flexible and adaptable when applying for rate changes. 

Two companies that currently implement surcharges are Desjardins and Travelers. Both programs are structured similarly. You get a 10% enrollment discount, a discount just for trying out UBI. So, what’s the maximum surcharge for UBI? According to FSRA, “Maximum surcharges vary by insurers. They are required to file their maximum UBI discounts and surcharges for approval with FSRA.” 

Either way, if you’re a good driver, you can save money on auto insurance

But, despite our survey revealing 57% of Canadians' interest in UBI’s use to save money, 67% of Canadians express concern about the accuracy of the programs. 

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Is usage-based insurance accurate? 

According to FSRA, before an insurer uses any of your data for rating purposes, “reasonable efforts must be made to ensure its accuracy.” Insurance companies must comply with rulings, ensure action to correct data issues, and quickly resolve any inquiry or dispute. 

Still, here’s the critical point for you as the driver, also from FSRA – the insurance company has to be ready to deal with inaccurate reporting. In other words, if you unplug the device before you drive, or if you see a low score, you can claim it wasn’t you driving. You could simply not report your poor driving. 

UBI doesn’t have eyes (yet). So they can’t see a rolling stop or when you run a red (though a red-light camera can). On Allstate’s Drivewise App, the fine print says it “records speeding events when a driver exceeds 125km per hour.” Under braking, it looks at any event with a deceleration of 13 KM’s per hour or more in one second. Notably, the app also states that Bluetooth and handsfree do not count while driving, only physical typing, scrolling, etc. 

I was curious to see how it all works, so I did some trial research. 

Three UBI companies offer trials of their apps

  • Allstate Drivewise
  • Onlia Sense
  • TD MyAdvantage 

Allstate didn’t give me many details of the trial beyond my distance travelled, duration, speed, braking, phone calls and phone usage.




Onlia, however, asks me to confirm if I was driving (they don’t tell me the stats until I accept that I was driving). So if you’re wondering, “What happens if my partner or friend drives home?” You can see not all driving affects your score. 




TD’s MyAdvantage App allows you to edit your driving history and shows you the scores, too. 

So, if you’re concerned about a negative driving score, you can edit them out. However, while I can’t confirm, I assume there’s a limit as to how much editing you can do before TD questions the validity of your score.



The good news is the screen grabs show usage-based insurance companies are willing to work with you to improve your score and get a better rate. It’s much better than demographic stereotypes that say young males are all high-risk drivers. 

I reached out to FSRA for commentary, which said, “All new or amended UBI programs must be approved by FSRA before becoming effective, and those applications will continue to be subject to rigorous review.” 

FSRA recommends shopping around for the company that suits you best because individual programs may vary including, “the frequency of the premium adjustments.

Addressing usage-based insurance privacy concerns 

Many Canadian drivers (56%) have privacy concerns with UBI. What big data are they collecting? What information are you giving to your insurer that might harm you in the future?

Usage-based Insurance programs (UBIP) data, according to FSRA, must be voluntary, and you must provide consent for the “use and disclosure of personal information by the insurer.” So, before enrolling, the insurer has to inform you of the following:

  • What personal information is collected
  • Who will use or have access to the information
  • How your information is used
  • The circumstances under which your data is disclosed
  • Your individual rights with your information (they can’t share your data with a third party unless you give consent and have to inform you of any changes to the contract)

The FSRA, in email correspondence, said, “All sponsors of UBI programs in Ontario are subject to applicable Canadian and provincial privacy laws in addition to the Insurance Act.” In fact, if you get a poor UBI score with one provider, a new insurer can only use your score if you willingly provide it (i.e. if you have a good score and want them to match the discount). 

If you’re looking to improve your score, you can simply start fresh; your old information isn’t privy to other insurers. 

One car insurance agent told me they only see your final score, not all the intricate details of how well you’re handling turns, whether you’re speeding or braking too hard. The agent added that they don’t see your GPS and location data. 

UBI data safety and security 

While the company’s analytics team can probably see where you’ve been (hey, it does show you in the app, at least to determine whether it was you driving or not), your information is under lock and key. Of course, that’s not to say there haven't been data breaches before. Know that I didn’t supply my VIN, SIN number, or credit card to start using the apps. 

Yet, it’s critical to read the fine print. The insurer may want to share your data with third parties to resolve insurance claims or respond to a police request following a lawsuit. What they can infer from location data could be telling. As a result, California bans all data except mileage (like the CAA MyPace program)

One more point of note, historically, these programs needed a device that plugged into your car’s computer, but the app changed all of that. However, the connected car is here and unlocking a whole new world of services and products for drivers. 

Car manufacturers pre-installing UBI devices

So, when you’re buying a new car, if you have data concerns, you may want to ask if there is a UBI device installed in the car already.  Ford recently announced a partnership with LexisNexis to offer Ford Drivers UBI insurance solutions in the US. 

In partnership with Tesla, Aviva launched InsureMyTesla because Tesla obviously has the analytics in the car; they just needed an insurance partner. 

For years, Volvo has been talking about an embedded black box because you want to connect with someone after a crash. If that reminds you of anything, know that GM’s OnStar program partnered with American Family Mutual Insurance in the US. 

UBI could be in the future from auto manufacturers, but will drivers sign up? 

The usage-based insurance market size potential 

Between April and December 2020, CAA reported their MyPace (pay-per-km) program saw an increase of nearly 300% compared to 2019.  Most Canadians (51%) want more control over their insurance pricing. Young drivers (18-34) are significantly more likely (70%) to see value in UBI than those over the age of 35 (56%). One industry report did reveal that your car insurance rates go down at age 40, so the numbers make sense. 

However, the current market isn’t indicative of drivers’ desires, with only 12% saying they have tried usage-based insurance, 7% using it, and 5% no longer making use of a usage-based insurance program. 

But, are some willing to try? Eighteen percent of respondents said they are willing to try usage-based insurance, but 27% stated they hadn’t tried it, nor are they considering its use in the future. 

However, as a result of COVID-19, 41% say they’d consider usage-based insurance.

Will you? 

The bottom line

You have options. If you choose UBI, your actual driving habits will affect what you pay. Review the terms and conditions before you sign up, and look carefully at the frequency of premium adjustments. Last but not least, compare car insurance quotes and ask questions. It’s your right to get the answers about your UBI scores and how they affect your premium.