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February 12, 2015

Telematics and lower car insurance

1 min read


If you’re a safe driver, installing a telematics “black box” device in your vehicle is an easy way to achieve lower car insurance premiums. While the law and good sense require you to carry insurance, no one wants to pay more for this coverage than necessary. That’s where telematics can help.

What is telematics?

Telematics technology installed in your car collects your driving statistics and other relevant information and transmits them to your insurance company so that you can (potentially) be rewarded for your safe driving habits. Historically, the only way insurance companies could assess safe driving habits was by the number of tickets and/or accidents a driver had been involved in. These numbers, of course, didn’t account for the number of accidents a driver might have caused, but not been directly involved in or cited for.

How does telematics work?

Telematics works via a device or gadget (a black box of sorts) that is provided by your insurance company. When installed in your car, this device monitors and provides data to the company on key driving actions, such as:

  • acceleration,
  • driving speed,
  • braking in real time,
  • and when you drive, such as the number of hours you drive between midnight and 4:00 a.m., a high-risk time for auto accidents.

A number of Canadian insurance providers offer this feature. Some companies offer a discount just for installing the device and up to 25 percent off your insurance for safe driving behaviour.

Is black box car insurance for you?

While the goal of having a “black box” installed in your car is to lower your insurance rate, it’s important to know that the information gathered from this device can be used either to benefit you or be used against you, depending on your driving behaviour. It’s wise to take a good, objective look at your driving skills before you agree to install one of your insurance company’s “black boxes.”

While a telematics device isn’t the right choice for every driver, for safe drivers, it can definitely lower insurance rates. With a telematics device, your personal driving behaviour is taken into account, not just where you fall on the insurance table.


If you’re looking to lower your car insurance rates, with or without telematics, we’d be happy to talk with you and provide no-obligation quotes for your consideration. Please call us at 1-800-731-2228 or email us at

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