One very popular example is Telematics enrollment. By enrolling in Telematics, drivers can earn a discount just for sharing some info about their driving habits with their insurance provider.
What is Telematics?
When it comes to Auto Insurance, 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 the 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. Across the board, most companies will monitor activities such as aggressive acceleration and deceleration as well as the times of day and night that the user is driving. Companies will often give a discount for the first term that telematics is applied, monitor your driving for the first term, then adjust that rate depending on the activity. Consider the following points to decide if you should look into adding telematics to your auto policy.
How Can Telematics Change My Rate?
Let’s take a look at the major points of interest with most Telematics Programs
Time of Day
- This is one of the most universally monitored factors. Most Telematics programs will pay close attention to the times of day that the participant is driving. 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.
- Don’t think of Telematics as a mini police system in your car that is looking for the same things that traffic officers are. Telematics devices typically do not pay much attention to things like missed stop signs, broken speed limits, etc. Telematics data is going to emphasize on how smooth of a driver the participant is. Things like aggressive acceleration or aggressive braking are high priorities. Drivers who accelerate consistently and always keep ample room between them and the car ahead to provide ample room for braking are typically rated well by Telematics systems.
- The more you drive, the more likely you are to get into a car accident. I don’t think anyone can argue with this logic. That being said, each Telematics program will track the number of miles being driven. 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.
Telematics and Privacy
Some drivers are apprehensive about trying telematics simply because they are concerned about privacy. This is a natural reaction to someone saying that they want to stick something in your vehicle’s diagnostic port to track driving habits. Drivers who have these concerns should be aware that these programs will have access to far less data than a normal cell phone. Telematics programs are less concerned with where people are driving and more concerned with how and when they are driving. People should base their decisions to participate in Telematics on if they feel that their driving style will play to their advantage or not.
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