Canadian Underwriter

Why this auto insurer will stop discount for autonomous emergency braking

July 27, 2021   by Greg Meckbach

Front view of red SUV emergency braking to avoid car crash

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Nova Scotia motorists who purchase autonomous emergency braking systems will no longer qualify for a discount with one insurer as of October.

In Nova Scotia, Aviva General Insurance Company has a 15% discount, to bodily injury and accident benefits insurance premiums, for vehicles with original manufacturer-installed autonomous emergency braking systems. This is according to Nova Scotia Utility and Review board member Roberta Clarke, in a July 23 decision approving several changes to Aviva General’s rate and risk-classification system for private passenger vehicles.

In its rate filing, Aviva General asked to remove the 15% discount, from vehicles that purchase autonomous emergency braking systems as an option, “due to difficulties in validation,” Clarke wrote. The change takes effect Oct. 1 for new and renewal business.

NSURB approved last week a number of other changes which will, overall, result in a rate increase of 17.8% to Aviva General’s private passenger auto book in the province.

Aviva General – like several other major insurers – is also going to start using credit scores as one auto underwriting factor in Nova Scotia. The insurer will not require clients to consent to a credit-scoring to obtain insurance but will require those who seek a discount reflecting a good credit score to consent to the company obtaining a credit score from its selected credit information supplier.

“A client who consents will only benefit from a potential discount if warranted by the credit score,” wrote Clark. If a client consents, but the supplier is unable to find a score, Aviva General will treat this as a “no response” and no discount will be given.

Another Aviva General change approved last week applies to convictions for drivers with novice or learner’s permits. At the moment, Aviva General classifies a conviction – either of driving with alcohol in the blood or failure or refusing to provide a breath sample – as major. Effective Oct. 1, those convictions will start being categorized as “serious” instead of major.

Aviva General expects the impact of that change to be small because the insurer has few, if any, risks with those alcohol-related convictions, the NSURB said.

NSURB also approved a change to Aviva General’s 5% loyalty discount, which applies if a Nova Scotia auto policy has been in force for at least three years with any company in the Aviva Group.

In its filing, Aviva General said it is “difficult to confirm with its current systems” whether a policy has been in force for at least three years with any company in its group. So Aviva General applied to change that discount such that it applies only to policies in force with Aviva General itself and not with any insurer in the Aviva group.

When its application was filed with the NSURB, Aviva General did not have any policies that had been with Aviva General for less than three years that would have qualified for the loyalty discount under the current eligibility criteria. Therefore the change has no impact, wrote Clarke.

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