"They can save money. They can save up to 25 per cent," says Desjardins spokesman Joe Daly.
It's the next level in usage-based insurance (UBI) technology. Two years ago, Desjardins began offering a telematic device that plugs into a vehicle's diagnostic port, to track acceleration, hard braking and the time of day you were driving, for instance.
Now, there's no plug-in device required. With Desjardins's new Ajusto app, all you need is your smartphone.
"You put it in your pocket, you put it in your purse, whatever. It automatically knows when you're driving and clicks in," says Daly.
Smartphone app is 'smarter'
The smartphone app is also "smarter" than the in-car device.
The app will also tell you how far you've travelled and whether you've been speeding, and uses the phone's gyroscope to determine if you've cornered a little too aggressively.
"It's really clever," says Daly.
"It runs an algorithm and knows by the movement of the phone whether you're driving or whether you're in a bus or whether you're in a train or on a plane or whether you're a passenger."
Minutes after the trip is over, the app rates the driver (in stars, out of five) on speed and driving smoothness. It notes the time of day, distance travelled and issues a score out of 100.
The average score for all trips is used to determine the amount of the discount, if any.
The app also keeps track of a driver's consecutive streak of "undistracted" trips. These are trips during which the cellphone wasn't used while driving.
Not a data hog, won't kill battery
Desjardins says the app, which is available for both iOS and Android, uses less than 30 MB of data per month for what it calls a typical driver (20,000 kilometres per year).
With Wi-Fi, which is the app's default setting, it uses less than five MB per month.
Battery consumption averages 11 per cent per hour of driving and 0.5 per cent per non-driving hour.
When the phone battery is less than 15 per cent, the app won't turn on. If it's running when the battery drops to 15 per cent, it will turn off.
Up to now, the app has been used mainly by beta testers, including Desjardins employees.
Susanne Silva, a section manager in Desjardins's call centre, has been using the app since September 2014, and now has an overall score of 92.
"So right now, I'm trending at about 20 per cent savings," Silva says.
When she first downloaded the app, Silva says she was checking it all the time.
Now, she says, she only checks it occasionally, to see how she's trending.
Some critics, though, say ease of use and potential savings are outweighed by privacy concerns.
It knows where you've been
"Our location can [contain] incredibly personal information about us," says Lori Andrews, a professor at Chicago Kent College of Law and author of I Know Who You Are and I Saw What You Did: Social Networks and the Death of Privacy. The app must remain on in the background, even when users are not driving, she said.
While not referring to Desjardins's app in particular, Andrews worries in general about the potential for data aggregation with other information from a smartphone.
"What if I've Googled the side-effects of an allergy medication that makes you sleepy, yet I still drive? That information could be used against me by car insurers," she said.
"We've seen a lot of leakage from data apps to other uses, to third parties. Health-care apps or fitness apps where you enter data. That information is being sold to pharmaceutical companies and life insurers."
Don't want to be tracked? Don't sign up
Desjardins says information from the app will only be used to reward good drivers with discounts and won't be used to raise the rates of bad drivers. The company says the app is voluntary and it's no more intrusive than many of the other apps that track location. The company says that if you're not comfortable with having your data collected, it recommends you not sign up for the program.
The insurer says that, as with any information in regular files, law enforcement and the courts can only access data from the app with a court order or subpoena.
Desjardins also says its terms of service explicitly state it will not share information with any third party other than the app developer.
But Andrews says apps can change privacy terms at any point, provided they have the user's permission.
"Facebook used to have a privacy terms of service that said, 'We are not going to give your information to anybody.' Now they make 80 per cent of their income by entering into deals where your private information is used to market things to you," she says.
"I think people should be very wary of this."
Desjardins says past experience with usage-based insurance has led to drivers being more conscious of their speed and driving habits and cut down on accidents.
"It's good for society," says Daly.
"These programs attract the safe drivers and those are the types of customers we want to attract."
Daly says about one-quarter of new customers signed up for the telematic device in their vehicles when they introduced it two years ago.
He says the company expects an even higher take-up with its new smartphone app, especially among younger drivers.
If you have a consumer issue, contact Aaron Saltzman
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