Insurance companies traditionally lump together drivers by age, gender, and location, using statistical data and averages to determine car insurance premiums. This is one of the biggest complaints about car insurance – that premiums are not based on individual performance. As a result, higher risk groups, like new or young drivers (check out isure’s advice for young drivers), tend to pay very high premiums. Now, with the use of Telematics Insurance or Usage-Based Insurance (UBI), your premium can reflect your own  individual driving habits.

If you are looking to pay lower rates on your Ontario car insurance premiums, Telematics Car Insurance may just what you are looking for.

What is Telematics Insurance and how does it work?

Telematics or Usage-Based Insurance (UBI) has combined leading-edge wireless communications and global positioning system (GPS) tracking technology. Telematic devices collects and analyzes data from moving motor vehicles.  UBI, or pay-as-you-drive insurance or pay-per-km insurance, involves installing a device that provides feedback on:

  • The distance you drive
  • The time of day when you are on the road
  • When and how you accelerate and brake
  • Cornering, speed and overall driving habits

Insurers track your driving behaviour in real time. The programs collect data related to how you drive, when you drive and where you drive to calculate your risk level.  In a nutshell, if you pose a lower risk of accident than the average driver, you can save money on your auto insurance premiums.

FYI:  Different types of telematic devices track different things. For example, a smartphone app can track your phone use while driving, but a plug-in device cannot.

Telematics Devices

Some of the common devices that are used in the telematics systems your auto insurer may use to collect usage statistics and monitor driving habits include:

  • Mobile apps
  • Diagnostic port plug-in devices
  • Bluetooth beacons

Also, depending on the provider, you might be able to transmit driving data through a built-in option like OnStar as well.

Pros and Cons of Telematics Car Insurance

Like traditional car insurance, telematics is specific to the vehicle. The device will record the driving habits of whoever drives your car. So, your premium would also reflect the driving habits of your teenager who borrows it. Here are some other benefits of telematics:

Pros of Telematics

  • Cheaper insurance for good, low-risk drivers. Drivers are able to receive a premium discount of up to 25% by meeting behavioural incentives to reduce their kilometres driven and drive more carefully.
  • The discount incentives encourage safe driving and reduce crashes
  • Insurers use your telematics data to ensure claim accuracy and reduce fraud by analyzing driving information at the time of a crash
  • In some cases, insurers can also track your car if it is stolen using telematics system GPS.
  • Gives you insights to improve your personal driving habit. Therefore, young and new drivers receive feedback to assist them to develop safer driving habits. For seasoned drivers, the feedback can offer tips for better mileage and proper car maintenance.

Cons of Telematics

  • Premium increases – Some programs can raise your base rate if you’re a bad driver. So, this means that auto insurers using telematics are not restricted to discounts only.
  • Discounts fluctuate based on driving habits.
  • Mobile apps can’t always tell if you are a driver or a passenger, so if you’re riding in someone else’s car, you may occasionally need to dispute the data.
  • Privacy concerns – In Canada, the data collected by an insurer is subject to strict privacy policies and can’t be used without your consent.
  • Extenuating circumstances – Incidents of hard braking, for example if a cyclist swerves in front of you, is not recorded in the data to substantiate the action.

Telematics Discount Criteria

When it’s time to renew your policy, you’ll be able to see whether you qualify for a discount based on your driving habits. You will also be notified how much your discount will be. Some programs require you to keep the tracking device installed at all times to maintain a discount. Others track your driving habits for one policy period and apply the discount to all future periods.

To get the best discount, you generally must:

  • Avoid rush-hour and nighttime driving
  • Have below-average mileage
  • Avoid harsh braking and cornering
  • Avoid quick acceleration

Drivers who see the best discounts may include stay-at-home parents, remote workers, retirees and gentle drivers.


Usage-based insurance will offer premiums tailored to your actual habits and tendencies, and attention to safety. Additionally, it also has the potential to promote safer habits. It’s important to remember that any of the best car insurance companies can offer telematics programs. However, no two programs are exactly alike. Our isure representatives can inform you about your insurer’s program, and can help you find the right program with the right insurer just for your unique needs.

isure works with 25+ certified insurers to give you access to one of the largest selection of best insurance company policies and options in Canada in the field of Telematics insurance. Learn more about isure telematics insurance by clicking here.

BTW, businesses having fleet business vehicles on the road can also benefit from Telematics insurance by allowing fleets to keep closer tabs on their vehicles for insurance pricing discounts – and improved safety; Click here to learn more.

isure Telematics Insurance means:

1. Operational Benefits

No matter which insurer you end up with, a Telematics program can improve: fuel efficiency, routing, logistics, preventative vehicle maintenance and stolen vehicle recovery.

2. Added Safety Benefits

Telematics-driven, regular safety performance scorecards, emergency response to get to an accident scene faster and reduction in frequency and severity of accidents.

3. iSavings

Why are good drivers subsidizing the poor ones? Let’s save you money by combining your individual real driver performance with traditional claims, automobile usage and driver record history!

Telematics programs are currently offered in for car insurance in Ontario, Nova Scotia, New Brunswick, Quebec, and Alberta. Other jurisdictions are considering the insurance systems.

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