Canadian Underwriter

Insurers now treating distracted driving as ‘major’ conviction

November 27, 2020   by Greg Meckbach

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In keeping with actions previously taken by Canada’s auto insurers, Northbridge General Insurance Company will start treating driving while using a hand-held communication device as a major conviction for the purpose of setting insurance rates in Nova Scotia.

The change takes effect Jan. 4, 2021 for new business and Feb. 4, 2021 for renewal business, the Nova Scotia Utility Review Board announced in a decision released Nov. 13. The change applies to both Northbridge General and Zenith Insurance Company.

In approving the change, NSURB noted many other insurers also treat distracted driving as a major conviction.

The three categories of conviction are minor, major and serious. Northbridge treats each classification differently, with respect to how many are allowed before the risk is no longer written and what level of surcharge applies, NSURB member Jennifer Nicholson wrote.

In Nova Scotia, drivers convicted of texting or using hand-held cellphones while driving face fines ranging from $233.95 for a first offence to $578.95 for a third offence with the addition of four demerit points on conviction.

In Ontario, distracted driving can result in suspensions of three days for a first offence, seven days for a second offence, and 30 days for third and subsequent offences, CAA reports.

“What we find out on the road is that the general population is not concerned about the ticket they get on the side of the road. What means something to them are points against the driver’s licence and how it affects their insurance rates,” said Sergeant Gord Keen of the Ontario Provincial Police during a 2019 panel discussion at Symposium West, a conference produced by the Insurance Institute of Canada.

“They don’t want to lose their licence – and they know the demerit points are going to lead to that – and then of course [auto insurers] could price them out of the market. Sanctions should get harsh because this is an extremely high-risk behaviour,” Keen said at the time of driving while operating a handheld electronic device.

Also on that panel was Robyn Robertson, CEO of the Traffic Injury Research Foundation. She said if someone is using an electronic device while driving, the issue is really cognitive distraction.

“It’s a function of how difficult or complex or emotional the conversation is,” Robertson said at the time. “If your mind is not on the road, there is the phenomenon of looking but not seeing. As you are driving looking at the road, your field of view shrinks as you become more cognitively distracted…which is when collisions happen.”

In its Nov. 13, 2020 ruling approving Northbridge’s auto rate changes, NSURB also approved an increase to Northbridge’s multi-vehicle discount in Nova Scotia from 15% to 20%.

NSURB also approved the use of credit scores to determine eligibility for a discount. For Northbridge, that change takes effect July 15, 2021, for new business and Aug. 15, 2021, for renewals. The insurer would ask for a client’s consent before using the credit score. Clients who do not consent would not be eligible for the discount.

The Nova Scotia regulator has approved the use of credit scores as rating factors for other auto insurers in the past.

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