Date Published: 2025/07/24

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Is usage-based insurance right for you?

A person with short gray hair is unpacking their EV while another person holds a child and charges the vehicle. The car is parked in a residential area, and they’re talking about usage-based insurance.

Ever wondered if your stellar driving habits could save you money? Dive into our guide on usage-based insurance (UBI) to find out how you can be rewarded for being a great driver. We've broken down the FAQs to help you decide if UBI is the right choice for you. 

What is usage-based insurance?

A usage-based insurance (UBI) program offers drivers more control over their car insurance rates. Rather than relying on traditional factors and statistics, such as age and driving history, to calculate your car insurance premium, UBI programs primarily rely on telematics to understand how often you drive and how safely you drive.  

To participate, you must first install a wireless telematics device in your car and/or download a UBI app on your smartphone (depending on the program). The device or app then provides your insurance provider with information on your driving behaviours. Your insurance rates are then calculated accordingly, rewarding both good driving behaviour and less time on the road with cost savings on your premium. 

Common driving behaviours considered in a UBI program are:

  • How often and how far you drive. The frequency and distance of your driving play a significant role in determining your usage-based insurance (UBI) rates. Insurance providers use telematics data to track how often you drive and the total distance you cover. If you drive less frequently and cover shorter distances, you may be eligible for lower premiums. This is because less time on the road generally means a lower risk of accidents. 
  • What time of day you drive. The time of day you drive can impact your UBI rates. Driving during peak hours or late at night can increase your risk of accidents due to higher traffic volumes or reduced visibility. Insurance providers may offer lower premiums for drivers who avoid these risky driving times. 
  • Speed in relation to posted limits. Your adherence to speed limits is a crucial factor in determining your UBI rates. Driving at safe speeds and following posted limits can lead to lower premiums, as it indicates responsible driving behavior. Conversely, frequent speeding can increase your risk of accidents and result in higher insurance costs. 
  • Braking and acceleration. Smooth braking and acceleration are important indicators of safe driving. Insurance providers use telematics data to monitor these behaviors, rewarding drivers who avoid harsh braking and rapid acceleration. These actions can reduce the risk of accidents and contribute to lower insurance premiums. By practicing smooth driving techniques, you can improve your driving score and potentially save on your car insurance.   

What UBI Programs and discounts are available?

Depending on which UBI program you choose, how much time you spend on the road, and how safely you drive, you could save greatly on your car insurance premium.  Here are some potential options for further consideration: 

Aviva Journey

Aviva Journey offers up to an instant 10 percent discount upon sign up, and up to a 20 percent discount based on your driving habits. The Aviva Journey app gives you the ability to review what driving factors affect your insurance premium in real time. Using basic sensors in your smart phone, the app will notify and reward you for safe speeds, smoothness/control of your vehicle, and attentiveness on the road. Upon renewal the enrolment discount is replaced by your earned discount of up to 20 percent. 

Intact my Drive

The Intact my Drive app offers drivers up to a 30 percent discount on their car insurance based on their driving habits and overall “safety score”. Drivers will receive a one-time 10 percent discount when they enroll in the program. Their discount is then recalculated every six months based on their “safety score” factors — including distracted driving, rapid acceleration, hard braking, speeding and risky driving hours.  

CAA Connect

CAA Connect offers drivers up to a 15 percent discount on their premium after one year along with an introductory five percent discount for the first year. To maximize their discount, drivers enrolled in this program must use the OBD device supplied by CAA and should drive less than 12,000 km per year, avoid speeding and avoid driving between the risky hours of 12:00 am to 4:00 am.  

CAA My Pace

This program differs a bit from the others mentioned above as a pay-as-you-go solution since it doesn’t track behaviours, only the distance you drive annually. CAA My Pace offers drivers a five to 75% discount on their car insurance depending on how many kilometres they drive. Low-mileage drivers who drive only up to 1,000 km per year are eligible to save up to 75% while drivers who drive up to 8,000 km per year can save up to 5%.  

How is the data collected used by my insurance provider?

The data collected by the wireless telematics device or the UBI smartphone app is used by your insurer to determine what discounts and cost savings you may be eligible for based on your overall driving behaviour. All data is stored in a secure server and is protected under Canada’s Personal Information Protection and Electronic Documents Act. The data collected by your insurer may be shared with third parties when required by law — such as in the case of a collision.  

To better understand what data you are sharing with your insurance provider, how it will be stored and how it will be used, review the terms and conditions of your policy, or speak with your insurance broker. 

If you have questions about your current car insurance policy and/or eligibility for a usage-based insurance program, contact an Orbit insurance broker today.  

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