When it comes to car insurance, most people want quick and inexpensive. In many cases, getting the absolute lowest price involves dropping important coverages. However, there are some ways that you can reduce the cost of your car insurance without changing coverage, like with telematics. By enrolling in a telematics program, drivers can earn a discount by sharing information about their driving habits with their insurance provider.

What is telematics?

Telematics is a general term used to describe a type of technology that monitors a driver’s habits in order to provide them with a more favorable rate. Typically, an insurance company will either require participants to install an app on their mobile device or plug a device into the vehicle’s diagnostic port to monitor driving activities. Most companies will monitor activities such as aggressive acceleration and deceleration, as well as the time of day the user is driving. Companies will often give a discounted rate for the first term that telematics is applied, monitor your driving for the duration of the first term, then adjust that rate depending on your activity.

How can telematics change my rate?

There are several factors that telematics monitors that can increase or decrease your rate:

• Time of Day: Most telematics programs will pay close attention to the times you drive. Someone who works an overnight job and drives mostly at night or someone who is always driving in rush hour traffic will typically be seen as more of a risk than someone who drives in mostly light traffic during daytime hours.
• Driving Style: Telematics devices typically do not pay much attention to things like missed stop signs and broken speed limits. It’s far more interested in how smooth of a driver you are. Habits like aggressive acceleration or aggressive braking are red flags and may result in higher rates.
• Mileage: The more you drive, the more likely you are to get into a car accident, so telematics programs will track user mileage. Someone who works from home and rarely drives will likely be favored over someone with a lengthy daily commute and a lot of road miles.

If you align with the favorable end of the above driving habits, you’re likely a great candidate to try telematics. Maintaining good driving habits while participating in a telematics program will typically yield added discounts. Even if you feel that you’re not be the smoothest driver, you can still opt to try telematics for an initial discount on your first term.

Telematics and Privacy

Some drivers are apprehensive about trying telematics simply because they are concerned about privacy. Telematics programs will have access to far less data than a normal cell phone, and it is less concerned with where you’re driving and more concerned with how and when you’re driving. You should base your decision on if you feel that your driving style will play to your advantage or not.

Reach out to your insurance agent to review your policy and decide whether discount programs like telematics are right for you.