What’s the most dangerous form of driving? What do the telematics say?

When it comes to the most dangerous form of aggressive driving, speed stands above the rest as most likely to cause a crash.

Research from the University of Waterloo has found that speeding is more likely than hard braking, hard acceleration and hard cornering to cause a vehicle to crash. The university combed through 28 million trips recorded with telematics data to see that speeding led to more crashes than the other riskier behaviours. In fact, the other forms of aggressive driving were statistically insignificant when it came to collisions.

What does this mean for an insurance company? They should assess a driver’s risk based on how fast they drive.

“For insurance companies using this telematics data to assess who is a good risk and who isn’t, our suggestion based on the data is to look at speed, at people driving too fast,” said Stefan Steiner, a statistics professor in the university’s mathematics faculty.

The study now provides factual evidence that speed is a leading cause for crashes. Previously, this was just an assumption, said Allaa (Ella) Hilal, an electrical and computer engineering adjunct professor.

“Some of the results are no surprise, but prior to this we had a whole industry based on intuition,” she said. “Now it is formulated – we know aggressive driving has an impact.”

Phil Gibson, managing director of personal insurance at Aviva Canada, agreed. “This analysis and the conclusions of the researchers confirms what we’ve seen in our experience for years: drivers who speed are more likely to be involved in an accident. We (insurers) have historically used moving violations, like speeding tickets, in pricing and underwriting auto insurance, because they reflect an increase in the risk of a driver having an accident,” he told Canadian Underwriter.

There are still some unknowns, however, Steiner cautioned, such as the same vehicle being used by different drivers and that further research was needed to verify their results.

Still, the study could impact how telematics data is used by the insurance industry. Rather than judging risk based on age, location or gender, a look at a person’s driving data could determine their premiums.

Furthermore, Hilal noted, to the extent that drivers know their data is being tracked and therefore curb their risky driving behaviours, better driving could lead to better rates. “Having this information exposed and understood allows people to wrap their minds around their true risks and improve their driving behaviours,” she said. “We are super-pumped about its potential.”

Recently, insurance industry experts told Canadian Underwriter that distracted driving was their biggest concern for drivers as crashes rise. Aviva Canada said the total number of vehicles repaired was up 2.2% from 2017-18 in the provinces in which the company operates.

Blame was put on people using their cellphones while driving, as well as people being distracted by infotainment systems in the vehicles. Now compound distracted driving with aggressive behaviour and you have a potential recipe for disaster, Gibson said. “Any of those four aggressive driving behaviours (speeding, hard braking, hard acceleration and hard cornering) analyzed would be made much more dangerous if the driver is distracted in any way.”

Source: https://www.canadianunderwriter.ca/insurance/whats-the-most-dangerous-form-of-driving-what-telematics-tells-us-1004167563/

Umbrella Coverage – Why is it important?

The definition

A personal umbrella policy provides additional coverage when a client’s base liability coverage is exhausted. It covers legal fees and loss of income associated with liability claims – even for incidents that occur outside of Canada.

The challenge

Coverage that protects property is an easy concept for clients to buy into. It’s straightforward to understand and is often mandatory. The need becomes less clear when it comes to coverage that protects against legal action.

Many clients associate liability with businesses or high-income earners. The reality is that most of us are targets for legal recourse, even when going about our regular, low-risk lives. Pet owners, social media users, people who do volunteer work… wealthy or not, these people are all vulnerable.

Trends suggest that Canadians are becoming more litigious, and court cases are resulting in larger payouts. And while lawsuits don’t directly result in the loss of the ‘things and stuff’ protected by standard personal insurance policies, people could indirectly lose assets if they need to come up with the cost of an unexpected settlement.

Finally, when you consider the modern hazards that impact our safety (e.g. texting while driving), it’s hard not to appreciate how unpredictable an everyday task can be – or how far a resulting lawsuit can go.

Start with a conversation

Get to know your clients. Sincere engagement does wonders for customer loyalty, and it has the side effect of revealing important insights. For example, do they:

  • Have children?
  • Have hobbies?
  • Do volunteer work?
  • Travel frequently?
  • Own rental properties?
  • Use social media?

Clients who answer ‘yes’ to any of these questions are candidates for personal umbrella coverage. What’s holding them back? Awareness is a major factor. But once you resolve that…

Overcome the “it won’t happen to me” mentality

There’s a misconception that court battles are the stuff of TV dramas. In many people’s minds, their ‘boring lives’ are enough protection. Here are four relatable scenarios to share with your clients to demonstrate how a personal umbrella policy could save the day:

  1. Social Media. Personal umbrella coverage protects against libel, slander and breach of privacy. The level of confidence internet users feel when posting from ‘behind the keyboard’ makes it too easy to broadcast messages to hundreds or thousands of people. All it takes is one person to retaliate; whether it’s the proprietor of a restaurant who receives a defaming review, or the parent of a child whose photos are shared.
  2. Teenagers. They’re maturing and finding their independence, which is exciting for parents to see. What can be concerning is the fact that they don’t fully understand the scope and potential impact of their behaviour. And if a dependent is responsible for a damaging action or breach of privacy, the parent may be responsible.
  3. Mandatory or not, auto accidents are so common that it’s undeniably smart to have this coverage. But base policy limits are relatively low considering the potential damages. When someone is at fault for a collision involving multiple vehicles – especially if any of the victims experience loss of future income or require long-term care – their standard coverage gets eaten up quickly.
  4. Hosting events. Small get-togethers involving close friends and family appear low-risk at first glance. However, unpredictability increases when you add variables like alcohol, pets, or small children. We hope our loved ones wouldn’t sue, but in cases where compensation is needed, the decision to pursue legal action becomes less personal and more about necessity.

A personal umbrella policy is often more affordable than increasing liability on each individual base policy, and it protects the actions of your clients and their families wherever they are in the world. As sensibly as we might go about our lives, we are all subject to the unpredictability of other people’s actions.

The bottom line for your clients; our world is evolving, so the way we protect ourselves must change too.

Graham Haigh began his insurance career in BC in 1994 after earning his Bachelor’s degree from Simon Fraser University and attaining his FCIP and CAIB designations. He is a past President of the Insurance Institute of BC and an award winning instructor for the Insurance Institute of Canada’s CIP program.

He joined Wawanesa Mutual Insurance Company in 2009 as Regional VP for BC & Yukon. In 2015, Graham moved with his family to Winnipeg to run Wawanesa’s Central region. He accepted the role of VP, Broker Distribution in 2019.

He can be reached at 204-985-3930 (office) or by email at ghaigh@wawanesa.com

Source: https://www.canadianunderwriter.ca/insurance/why-your-clients-need-personal-umbrella-coverage-1004165274/