If you’ve been shopping for car insurance, especially usage-based insurance or UBI, you’ve probably read something about telematics in vehicles. Before signing up for such a service, it’s helpful to understand what exactly telematics is. Here’s what you need to know:

What is telematics?

At its most basic, telematics is a method of wirelessly transmitting real-time data over long distances. In vehicles, telematics technology uses sensors to monitor things like a car’s speed, location, acceleration, braking, steering, g-forces and more. That data is then sent wirelessly into the cloud. Car companies, insurance providers and operators of a large vehicle fleets may use telematics info to monitor vehicles and their drivers.

Telematics is not exactly new technology, although it is relatively new in the auto insurance world. The word “telematics” starts to appear in the early 1970s, and peaks in popularity in the 1990s according to Google’s data. Interestingly, usage of the word began to increase again in the 2010s. Not coincidentally, that’s around the time usage-based insurance (UBI) became available to Canadian drivers.

How does telematics work? 

Traditionally, you’d have to physically plug a special telematics dongle into a vehicle. The dongle would then collect data from the vehicle’s on-board sensors and transmit that data to the cloud. 

These days, smartphone apps have replaced many of those old telematics dongles, at least for usage-based insurance programs. Smartphones themselves have so many built-in sensors they can collect the necessary data as you drive and transmit it to the cloud. No cables or plugs required! 

Telematics and usage-based insurance 

Usage-based insurance (or UBI) — like Sonnet Shift — is a personalized approach to car insurance that uses telematics data such as acceleration, braking, speed and more to monitor a driver’s behaviour behind the wheel and adjust insurance rates accordingly. Sonnet Shift in particular uses a driver’s smartphone to keep an eye on driving behaviour patterns.

With Sonnet Shift, you could earn savings of up to 35% for driving safely. You could save even more by driving less with an annual mileage discount of up to 10% on renewal. But, very risky drivers could pay up to 30% more. It’s simple: safe driving helps you save money.

Where else is telematics used?

In this day and age, telematics is everywhere. For example, NASA spacecraft transmit enormous amounts of real-time data back to mission control, which uses it to ensure the ship is functioning properly and stays on track. Formula 1 racecars rely on telematics too. These multi-million dollar cars are right on the cutting-edge of vehicle technology; they transmit vital real-time information about the health and status of each on-board system to ensure the car (and driver) are operating at peak performance for every lap of every race.

So many of the vehicles you see everyday on the road are also using telematics. Delivery vans, buses, emergency vehicles, car rental fleets, construction vehicles and long-haul trucks are all often outfitted with telematics systems. Those companies typically use the data to improve service while keeping track of and maintaining huge fleets of vehicles.

Questions about security and data privacy

Concerned about data privacy? That's totally understandable. Insurance providers must follow all applicable privacy laws and regulations within each province that protect customers from unauthorized usage of their information – this includes usage-based insurance. Knowing this, you can rest assured that any details that are tracked or recorded will remain secure. Keep in mind it’s also up to you to know exactly what you’re signing up for.

To that end, you can find much more information about Sonnet Shift on our website and in the Sonnet Shift FAQs.