Telematics as well as usage-based insurance (also known as UBI) are changing the way car insurance works. If you wish to have more control over how your insurance rates are calculated, understanding these terms is beneficial.
What does Telematics mean?
Telematics is a type of technology that works in conjunction with data analytics to monitor your driving habits. It is a small device that is either installed in your vehicle or connected through an app on your smartphone that can track your driving speed, your braking, your distance traveled, time of day you typically drive, as well as cornering. The data is then provided to the insurance company who can use it to calculate a discount on your insurance premium based on your driving behaviour.
What does Usage-Based insurance mean?
Usage-based insurance, also known as UBI, is a type of car insurance that relies on telematics to personalize your insurance premiums based on your driving habits. Unlike standard car insurance which typically relies on generalized information such as your age and vehicle type, UBI can focus on the how, when, and where you drive. Drivers who practice safe habits or even drive less frequently can often benefit from lower insurance premiums using this method.
How does UBI work?
1. Installation: Once you agree to UBI, the insurance provider can either send you a plug-in device or ask you to download a specific app that connects to your vehicle.
2. Tracking data: The telematics system will monitor a variety of factors such as your speed and acceleration, braking patterns, the time of day you drive and distance travelled.
3. Assessment: Using the data provided, you can receive an added discount.
Benefits of Telematics and Usage-Based Insurance
Some benefits of utilizing telematics and UBI can include:
1. Customized premiums. Telematics typically offer a personal premium that’s fairer by providing data on your driving behaviour.
2. UBI normally encourages safer driving practices. Some companies even offer a discount just for simply signing up and installing the device.
3. Potential reduced costs are normally offered by UBI if you drive less frequently or work from home and rely on your vehicle less.
4. By encouraging people to drive less, telematics can have a positive impact on reducing emissions.
Things to note
Ontario UBI is gaining popularity but the adoption is still evolving. A great number of insurance companies have already implemented UBI programs to allow drivers to enjoy customized premiums, but not all have yet.
As well, some individuals are concerned about privacy with the data collection aspect. However, the majority of insurance companies strictly utilize the data collection for insurance purposes only.
It’s also important to note that some UBI policies may have a limit on how much your premium can be reduced leading to savings varying on your driving data.
Why consider Telematics with Sutherland Insurance?
At Sutherland Insurance, we understand that telematics offers a way for you to save on your car insurance but we also understand that every driver is unique. Our team is proficient in the latest insurance technologies so that we can help to navigate usage-based insurance programs that suit your driving habits.
Whether you’re new to UBI programs or considering switching, we’re here to provide personalized advice to ensure your insurance coverage aligns with your needs. Telematics and UBI are changing the way car insurance works in Ontario, so by rewarding safe driving and providing more custom premiums, UBI offers a creative solution to the traditional insurance model.
For more information on how telematics can help with your insurance policy, contact Sutherland Insurance today. We’re always here to help understand these modern insurance solutions with confidence.
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