Link driver testing to premium point: broker

If you thought Mike O’Grady was done talking – you thought wrong.

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If you thought Mike O’Grady was done talking – you thought wrong.

“In the insurance industry, they are focusing on fraud, and they overlook the most basic thing – teaching people how to drive,” says O’Grady, the broker/owner of O’Grady & Associates Insurance Services Inc. in Tilsonburg, Ont. “My idea is: why don’t you offer a voluntary testing to your policyholders, every five years, and if you pass the test, you get a discount on the base rate.”

O’Grady finds it ironic that an industry that “can be so anal” when it comes to inspecting homes and commercial buildings, can seem so blaise about allowing outside sources to test drivers.

“On Newstalk 1010 recently there was quite an uproar on driver licensing, how it is subcontracted with some callers saying that for $500 you could get a license and be able to bypass the course, bypass taking the exam,” says O’Grady. “The state of truck driver testing was also discussed. What a joke!”

O’Grady is referring to Serco, the multinational corporation that operates as DriveTest under a 10-year contract with the Ministry of Transportation. Serco, as of last year, has had the power to ‘self audit’ and ‘self report’ any violations of provincial testing standards.

A Toronto Star investigation found that the province’s truck-driving licensing centre in Woodbridge, Ont. (operated by Serco) was violating ministry standards by not testing tractor-trailer candidates on expressways or roads with speed limits of 80 km/h or higher.

And when it comes to driver training and testing, O’Grady feels it is something that the province’s insurers should come together on and use to everyone’s advantage. (continued.)
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“Everybody could use a little refresher from time to time, me included,” he told Insurance Business. “If the insurers can spend so much money on advertising, why don’t they offer skid driving courses? Or dangerous driving courses? I brought that up with an insurer a while ago, and I got the typical response, ‘Oh, that’s a good idea. Do you think if we did it ourselves as a company it would go over?’ And that’s the problem with the industry – we’re selling identically the same product. Everyone wants to put their own unique stamp in car insurance, and there is nothing unique about it. Zero uniqueness to it.

“What we do need is a group effort.”

O’Grady feels that if the broker association took it on as a product, ongoing, optional driver testing would take off – along with the added benefit of helping to root out fraud and educate the consumer.

“Insurance fraud could be addressed in the testing, and there would be a chance to explain car insurance to the consumer,” he says. “A lot of people don’t know what collision is about. If the IBAO brokers spearheaded this, we would be saviours.”

But when it comes to telematics, and the wealth of information it provides on driver behaviour and its proven track record on improving driver behaviour, O’Grady has doubts.

“Telematics is a little bit funny. They are gathering data under specific items – how fast you go, braking – but who knows where this will be going?” he asks. “One of the insurers said to me he was casually talking to an adjuster, and the adjuster said, ‘You’ve got five per cent of the population using it now, next it will be 10 per cent. Soon the government will be making it mandatory.’ (continued.)
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“Let me tell you,” continues O’Grady, “down here in this area where I live, nobody wants anybody intruding on their privacy whatsoever. I don’t think, personally, that it will fly. And who knows where they are going to use some of that information down the road? In Britain, they are now using that information against drivers.”

Although O’Grady sees the merit in telematics devices providing feedback to drivers, ultimately improving their driving skills, he can’t see the harm in offering discounts through voluntary testing.

“I don’t see a downside to it, and it would resolve a lot of problems,” he says. “And there would be a lot of people willing to get retested if they could save 10 or 20 per cent on their insurance.”


 

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