What are telematics? Should I use them?

'Telematics' as they relate to insurance refers to information being collected on drivers and policy holders when they're using their vehicle. Typically you plug in a little device to your cars computer and it tracks the basic operations of the vehicle for a set period of time.

Different companies track slightly different actions but in general the metrics are around:

How fast you drive. 
Frequency of sudden braking events. 
What time of day you're travelling.  

"NOPE. I'm out. I'm not letting them monitor everything I'm doing. They'll just use it against me later." 

I get it. It feels like a bad idea immediately. 
​But let's hear it out. 

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HERE'S THE DEAL.

1) For being a willing participant you get an immediate discount on your auto premium. Often 10-15%.
That's an easy $100 or more for the average driver in Nova Scotia. 

2) The data collection happens only ONCE and lasts for usually a 6 to 9 month period. So we're not talking about monitoring your cars forever...it's not even for one year. 

3) *QUALIFYING* drivers are eligible for up to 30% off their premium the next year.

Note the word QUALIFYING. 
You can't drive like Cal Naughton Jr and expect to cash in the following year.

via GIPHY

4) THEY WON'T USE YOUR DATA AGAINST YOU.
There is a strict code of conduct around what is being tracked, and what that data can be used for.
None of it can be used against a policy holder for underwriting or claims purposes so you can set aside the paranoia. 

5) It may actually improve your driving habits.
Insurer's believe that by being more conscious of how you're driving you'll develop learned behaviors that stick with you.

Once you stop all the speeding for the 6 months to pass this test, you may realize you don't actually need to speed. Whaaaaat?

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Intact Insurance is one carrier on the front line of this stuff. They use an app on your phone to do the heavy lifting for tracking the data, and as a teaching tool so you can see how you're doing.

Click on the app after a drive, and you can see the details of the drive on a  map right down to where you had to jam on the brakes.

Yes. We're inching closer to the beginning of a Black Mirror episode. 

But aren't we already kind of there with technology? 

If you're willing to bank online (which I LOVE) then what's the worst thing that can happen to your 'sudden braking history' from your Nissan? 

I'M CONSIDERING IT A 6 MONTH DRIVING CHALLENGE.

HERE'S WHY 

1) It doesn't cost me anything.
In fact...my insurer is offering me 150 bucks off the cost of the policy just to participate this year, and the possibility of doubling that money NEXT year.

2) I have the cheat sheet to this test. 
Don't speed over 120 if possible, avoid hard braking situations, and try not to drive between 11am-4:30am. If my lifestyle makes the above achievable why not try and collect some more discounts?

3) Even if I fail the test horribly because I 'live my life a quarter mile at a time'  the guarantee of not being rated on the data makes it a fair trade for the upfront discounts in a lot of cases. 

4) It's fun anytime you have a chance to try and 'beat the system'.
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5) I may actually develop some better driving habits. I haven't had a driving test in like 20 years and while I THINK I'm the greatest it's fair to say that everyone could benefit from an occasional refresher on best practices. 

FINAL THOUGHT

All I'm saying is that before we all get out the torches and pitchforks against telematics let's make sure we have all the facts.

Talk with your broker about which companies monitor what, and if you're a good candidate for them. They're not going to be EVERYONE'S best option, but if you're at all competitive and enjoy saving money it can be a pretty good offer. 
  
Maybe if insurers connected all the data to a giant leaderboard and put some prizes and hype around it people would actually get into it.
I know a few people who'd be into competing purely for bragging rights.
​Oh and discounts/prizes.

​MD