What is a Telematics Device and How Do They Affect Car Insurance?

Have you been hearing a lot about telematics but you’re not sure exactly what the term means or how it relates to car insurance? It’s been a popular topic with our clients lately, so we’ve put together some information to answer any questions you might have!

What are Telematics Devices?

When telecommunication and informatics are merged, it becomes known as telematics. In relation to vehicles, telematics devices are used to gather information about how you drive.

In recent years, the amount of vehicles with telematics device is estimated to have doubled. In fact, most vehicles built from 1996 onward have telematics capabilities built into them by way of the car’s on-board diagnostics port (OBD II Port).

What Kind of Information Do Telematics Devices Gather?

Different telematics devices collect various information and depending on the device you have, it could include:


  • GPS tracking
  • Your speed
  • How much and how far you drive
  • How quickly you brake
  • The time of day you drive
  • If your airbags have been deployed
  • If you’ve been in a collision

How Can Telematics Devices Affect My Car Insurance?

Many insurance companies offer telematics programs to their clients that can ultimately help them save on their car insurance.

One of the most common ways of doing this is by offering safe driving discounts for drivers whose behavior is tracked via their telematics device. If a driver follows speed limits, doesn’t brake hard, and drives most often during daylight hours, these are a few things that can help them be considered a safe driver. And safe drivers are often eligible for a generous discount on their auto insurance!

If your driving habits tend to lean more toward speeding and braking hard, your device can also be used to serve you safe driving reminders, and often these reminders and other information can come to you right from your smartphone!

There are plenty of other ways you can use telematics devices to your advantage! Contact your insurance provider to find out more about getting a great deal on car insurance.