Picture this: your next insurance bill isn’t just based on your age or where you live, it is shaped by how, when, and how far you drive, tracked in real time by an app on your phone. For years, Ontario drivers have been enticed by usage-based insurance (UBI) programs that promised discounts for safe driving, with the reassurance that their premiums could never go up. That safety net is gone. In a regulatory shift, Ontario’s Financial Services Regulatory Authority (FSRA) now allows insurers to use telematics data not just to reward, but also to penalize, drivers. The result? Your driving habits could now save – or cost – you more than ever before.
This change signals a new era for auto insurance in Ontario, where technology, data, and regulation intersect to create a more dynamic and personalized insurance experience. Whether you’re a cautious commuter or someone who racks up late-night kilometres, your driving data is now at the centre of your insurance story.
From Discount-Only to Double-Edged: The New Telematics Rules
Until late 2021, Ontario’s UBI programs were strictly “discount only”—no matter what your driving data revealed, your rates could NOT increase. That changed when FSRA announced that insurers could apply surcharges for risky driving or high mileage, provided these changes were vetted and approved by the regulator. This shift was designed to give consumers more choice and flexibility, while allowing insurers to better align premiums with actual risk.
The FSRA’s position is clear: “Good drivers will be rewarded with lower rates. Drivers with high-risk driving habits may pay more. Drivers control their driving behaviour and therefore have some control over rewards that are available to them,” a regulator told Global News.
How Telematics Apps Work—and Who Offers Them
Telematics apps and devices collect a wealth of data, including speed, acceleration, braking, cornering, time of day, and distracted driving (such as texting or handheld phone use). This information is analyzed to create a risk profile and determine your eligibility for discounts – or now – surcharges.
Some of the most prominent telematics programs in Ontario include:
- TD MyAdvantage: Available to Ontario and Quebec drivers, this app offers up to 25% off at renewal after a minimum of 120 days and 1,000 kilometres of safe driving. Risky driving can reduce or eliminate the discount.
- Intact my Drive: This app offers an immediate 5% discount for enrollment and up to 30% off for consistently safe driving, tracking metrics like speed and phone use.
- Travelers IntelliDrive: A 90-day program that can save Ontario drivers up to 30% if they drive safely, but warns that “riskier driving habits” can reduce or eliminate the savings.
- CAA MyPace: A pay-as-you-go model for those who drive less than 9,000 kilometres per year. Drivers who exceed the threshold simply don’t receive the discount, but with the new rules, surcharges for higher mileage are now possible.
What Data Means for Your Premium
The rationale behind these programs is straightforward: if you drive less or drive more safely, you should pay less. Conversely, risky driving (i.e. speeding, abrupt braking, late-night trips, or frequent phone use) can now result in higher premiums. For example, pay-per-kilometre programs may apply surcharges if you exceed a set mileage limit, while pay-how-you-drive models can penalize aggressive or distracted driving.
Consumer Considerations and Privacy
While the allure of savings is strong—some drivers report premium reductions of up to 50%—the new rules mean that drivers must weigh the risk of potential surcharges. Experts advise reading the terms and conditions carefully and considering whether you can afford a higher premium if your driving habits don’t measure up.
Privacy remains a concern, as telematics apps continuously gather sensitive data. Privacy laws such as PIPEDA apply, requiring insurers to handle telematics data with care and obtain informed consent. Insurers are required to safeguard this information and obtain informed consent, but drivers should be aware of what they’re sharing and how it might be used. Note that most UBI programs require a smartphone app to stay active at all times (even while you sleep), meaning your location and activity could be tracked around the clock, not just when you’re driving.
The Bigger Picture: Fairness and the Future of Insurance
Insurers argue that UBI programs can make roads safer by incentivizing better driving and offering fairer premiums based on actual risk, not just proxies like age or postal code. As technology and algorithms become more sophisticated, the gap between premiums for safe and risky drivers is likely to widen. This could benefit young or urban drivers who might otherwise pay more under traditional models.
The broader issues will need to be addressed considering over half of Canadians are willing to embrace technology for personalized car insurance discount. As the landscape evolves, it’s critical for insurers to communicate clearly, protect consumer data, and ensure their programs comply with FSRA’s oversight and privacy laws.
Conclusion
Ontario’s telematics revolution is here. With insurance companies implementing apps and UBI programs to lead the way, drivers now have more control—but also more responsibility—over their premiums. For insurers, this is an opportunity to innovate and build trust by offering transparent, data-driven products that reward safe behaviour while managing risk fairly and compliantly.
Written by Sean A. Brown, Partner
