How much could you save on car insurance with telematics?

July 21st, 2016  |  Auto Insurance

It's no secret that the better driver you are the lower your car insurance premiums are. The cost of your car insurance in Canada is calculated on a variety of factors which include (but aren't limited to) your age, occupation, the type of car you drive, and your driving record. If you have no accidents, traffic tickets, or moving violations, your car insurance is likely to be much cheaper than someone who has several tickets.

Thanks to technology, there's a new way to save on car insurance. The great news is that you don't even need to do anything except drive safe.

What are telematics?

According to the CBC, vehicle telematics "consists of a device that attaches to the diagnostics port in your car and measures everything from acceleration, speed and braking to the time you're behind the wheel. It's part of a trend called usage-based insurance. Usage-based insurance is the ultimate in rating fairness because it essentially lets the driver control their own insurance rate through their driving behaviour."

Telematics pay attention to the way you do things, and report back to the insurance company. Your safe driving is verifiable, and that can help you save on car insurance.

How can telematics help you save on car insurance?

To some that may sound like a huge invasion of privacy, but if it helps save on car insurance isn't a little invasion worth it? State Farm Insurance says that using vehicle telematics can help you save big bucks on your car insurance: up to 25% on the cost of your annual premiums. Whether you have one car or two or more, saving money on the cost of your annual car insurance premiums is always a smart idea.

How can you take advantage of telematics?

Lowering your car insurance with telematics is easy. All you have to do is consent to the device (an app or GPS-like-system) tracking your driving and you're on your way. The telematics system monitors your driving behaviour and gives you a score. The better your score, the lower your car insurance premiums.

Some telematics systems calculate your driving score based on four different criteria: safe driving (including fast acceleration, hard braking and hard cornering), average rate of speed, the frequency and times of day you're behind the wheel, and the distance you travel with each trip.

It's important to note that If you're currently in a contract your car insurance premiums will be adjusted upon the next renewal. If your car insurance policy is coming up for renewal in the next three to six months, now is a good time to get telematics. That way you have a bargaining tool when negotiating your next car insurance policy.

If you're unhappy with the discount, you can always shop around (and shop your good driving record around) to find the best rates for the car insurance you need. A discount is only as good as the competitive offer. Don't be afraid to get price quotes from different insurance providers (usually two or three) and use the quotes to negotiate a lower rate with your current car insurance provider.

If you're a safe driver, you should take advantage of the savings.

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