Are Telematics the future of the Ontario Auto Insurance product? Find out what you need to know about the insurance industry's newest technology!
Down the road the auto insurance industry is going to take a pit-stop and pick up a new passenger; Telematics. What is this new passenger and how will it affect your auto insurance rates? That depends on how you drive.
Telematics is the technology of gaining and storing information from devices attached to a vehicle. This device will provide your insurance company data on how you actually drive your vehicle. Look at it as Usage-Based Insurance. The devices, which fits neatly into your car’s telecommunications plug (the one mechanics use to troubleshoot problems), will show how often and how far you drive, how fast you drive, how you brake or turn corners, and when and where you drive.
Essentially, telematics will capture how you use your vehicle. Before telematics, insurance companies would rely on information such as age and drive to work, among many other variables, to approximate how a person uses their vehicle. This would then partially determine your auto insurance premium.
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With Usage-Based Insurance you will pay for how you use your car. Speed a lot in one month? Your premium will increase. Drive the speed limits and brake properly? Your premium will decrease. While these examples are simplistic, with Telematics drivers will be in more control of their premiums than ever before. It is important to note that not all insurance companies are going down this route. There are still a lot of traditional options available.
The Insurance Brokers Association of Ontario will be coming out with their offering by the end of 2014.
Do you have questions about telematics or want to know more about insurance in general? Make a comment below or go to our contact us page.
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