Under The Hood Of Usage-Based Car Insurance: FSCO Issues Guidance On Privacy, Permissible Data Use, And Pricing

The Next Big Thing in privacy is the advent of usage-based insurance ("UBI"), made possible by a telematics device – a small gizmo that plugs in to the diagnostic port of a car, monitors a driver's driving habits, and sends that information wireless to an insurer/third party. Insurers in turn offer up to 25% savings on insurance rates based on "safer" driving. Available for over a year in the US, insurers have now begun offering similar programs in Canada, prompting the industry regulator in Ontario, the Financial Services Commission of Canada ("FSCO"), to release a bulletin designed to outline what it views as acceptable and unacceptable practices with respect to privacy, pricing and marketing of such programs.¹