Driving smart and saving big with telematics

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Want personalized auto insurance? Telematics tracks your driving habits and can earn you discounts for being a good driver. But beware: some insurers now surcharge poor driving behaviour.

Find out more about how telematics can save you money on your auto insurance.

What are telematics applications?

Telematics applications are what powers usage-based insurance, an entirely optional program offered by insurers that tracks driving behaviour and assigns more accurate rates.

Telematics devices traditionally track the following:

  • Sudden braking
  • Acceleration rate
  • Idling
  • When you drive (time of day)
  • How far you drive
  • Vehicle speed
  • Vehicle positioning
  • Distance travelled
  • Distracted driving (with the mobile app)
Example of a telematics device
Fig. 1 Example of a telematics device

Telematics data is collected most through an app on your smartphone or sometimes through a small device that is plugged into either your CAN-BUS or OBD II port. The data is analyzed by your insurance company and used to gauge your overall driving behaviour, patterns, and trends. The information is used to calculate personalized auto insurance premiums for you – perhaps at a discounted rate!

Which insurance companies offer telematics, and which surcharge?

If you score poorly while using telematics, you won’t qualify for a discount after the initial review period, and some insurers will even penalize you for risky driving behaviour (with a maximum of a 10% surcharge). Here are the insurers Mitch works with that currently offers telematics and some details about the program they offer:

 
Table 1. Comparison of Telematics Programs Across Insurance Carriers1
Carrier & ProgramEligibility RequirementsEnrollment Discount (%)Potential savings (%)Surcharge (Y/N)Rate Change Frequency
Aviva: “Aviva Journey”
  • Principal driver must be the one to enroll
  • Must have valid G2 or G license
  • Driver must have a smartphone and data plan
10%Up to 20%Y (up to 5% increase)
  • Annually, but drivers enrolled in program less than 120 days will have enrollment discount until next renewal
CAA: “CAA Connect”
  • Parent must be primary driver and rated DR9 or higher with CAA
  • Occasional drivers must be at-fault claims free for the last 8 years and conviction free in the last 3
  • Cannot be used with CAA MyPace
5%Up to 15%N
  • Annually, but newly acquired vehicles added to program less than 180 days before next renewal date will have enrollment discount
Intact: “my Drive”
  • Principal driver must be the one to enroll
  • Must have a smartphone and data plan
10% (Applies on new policy term)Up to 25%Y
  • Adjustment updated on each renewal
Pembridge: “My_Bridge”
  • Can only enroll at new business or renewal only
  • Must have G2 license
2.5%-10%Up to 30%N
  • Minimum of 6 consecutive months
  • Additional monitoring period added for new drivers, if enrolled driver changes, or address changes
Travelers: “IntelliDrive”
  • Have a valid G2 or G driver license
  • Have a smartphone with data plan
10%Up to 30%Y (up to 10% increase)
  • Annual, same rating will apply for lifetime of policy unless there is a policy change
  • If driver retries the driving evaluation to improve their score, rating will be updated on renewal
Wawanesa: “Drive Change”
  • Must be principal driver
  • Have a smartphone with data plan
10%Up to 25%N
  • Discount is updated each renewal based on driver score
Data sources: Aviva Journey; CAA Connect; Intact My Drive; Pembridge My_Bridge; Travelers IntelliDrive; Wawanesa Drive Change;

Telematics monitors your driving for an initial period, usually until your next renewal. If your scores aren’t ideal, you can opt out after the initial period to avoid surcharges on your insurance

What are some concerns drivers have about telematics?

An initial concern with telematics was to do with privacy. Back in 2013, car-tracking devices were the subject of fear and doubt. This came, in part, due to a lack of understanding as to how telematics devices worked, as drivers were afraid telematics devices were being used to track their location. A study in 2022 from MonkeyGeek examined the likelihood of drivers accepting telematics devices and found Gen Z drivers were the most open to the idea, followed by millennials.

Telematics devices do not track driver locations. Instead, they track behaviours that can be monitored through the application or black box, such as how long the car was being driven for, how fast it was being driven, how fast it braked, etc. Unfortunately, this isn’t common knowledge with many would-be participants of the program.

Changing driver behaviour through awareness

The point of telematics from the insurance companies’ perspective is to try and reward good drivers who are less likely to get into an accident. Some insurers also say they’re trying to change people’s driving behaviours through awareness.

Drivers are likelier to watch their driving behaviours, especially when incentivized with discounts. Through feedback from telematics apps, they can see how each of their trips adds up and how well they score, meaning that as they drive each day, they’re likelier to make better choices.

It’s a win-win. Drivers get better rates, insurers get lower-risk clients, and the roads stay safer.

Should you try telematics?

Telematics applications can be a way to save on your auto insurance. When you sign up, there’s an initial period of data gathering for almost every company where you can gauge whether or not the program is right for you. If eligible, you’ll receive a sign-up discount (usually around 10%) and additional savings based on your scoring on your first renewal. You will also have an initial period to discover just how the app will score you.

Usage-based insurance, or telematics, are entirely optional. If you’re a not-so-great driver or a driver still adjusting to Canada’s road laws, signing up for a telematics program may not be the wisest decision. If you do register but then decide you no longer want to participate, cancellation is easy. All you need to do is call your insurer at any point during your policy period. Since the program is optional, there’s no surcharge for cancellation nor time limit to doing so.

While the average customer does save on their premiums, again, if you’re not confident in your driving habits, you don’t have to opt in. If you’re uncertain about your driving, telematics can actually encourage you to practice safer behaviours, or even to drive less. It’s usually a good fit for younger drivers who are already facing higher premiums, as they’ll receive the most savings.

Ultimately, it’s your choice. Speak with a Mitch insurance broker to learn more about telematics and see if they’re right for you.

Thanks to Mitch Insurance’s Cassie Gilroy, retention manager in service, for her input on this post.


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