The term “telematics” describes the use of technology to keep track of driving behaviors and habits. This type of technology is used in a variety of industries, including ridesharing and delivery services. In these situations, telematics is used to evaluate employees and/or calculate wages and payments.
Recently, the use of telematics has become more common among car insurance companies as well. Car insurance companies may use telematics to calculate the premiums they charge, based on a review of certain driving characteristics.
About Telematics
If your insurance company uses telematics, you will be asked to download an APP on your smartphone. The application apples to the driver who should the owner of the smartphone. This will mean it will not matter the vehicle you are driving and is indicated to be more accurate that way. The application is intended to collect relevant data about the way you drive.
Typically, the insurance company will want to keep track of your total miles driven, speeds, cornering habits, braking habits, and destinations visited. The insurance company may also be interested in the time of day or night you are most often on the road, as certain times of day are more dangerous for drivers than others.
How Do Insurance Companies Use Telematics?
When calculating your car insurance premiums, the insurance company will use telematics data to determine your level of risk. If your braking habits, cornering habits, and speed indicate that you are a relatively safe driver, your premium will likely be lower than other drivers in the same demographic. However, if you have specific risk factors, such as bad driving habits or dangerous destinations, you may not get discounts associated with safer driving habits.
Not all insurers are using telematics at this time. However, several well-known insurance companies are already incorporating this technology into their policies. Examples include Safeco, Integrity, and Progressive.
Is Telematics Beneficial to Policyholders?
Most insurance companies that are using telematics are trying to improve the fairness of their premiums, as well as to save money on claims. However, this technology can be beneficial for policyholders as well. Some of the benefits of telematics for policyholders include:
- Lower insurance premiums – If you are a safe driver and/or you don’t use your car as much as other drivers in your demographic, having a policy based on telematics can result in lower premiums.
- Incentives to drive safer – If you know your driving habits are affecting your policy premiums, you will have an incentive to drive safely. This not only lowers your premiums over time, but it also reduces your risk of being involved in an accident.
Review Your Car Insurance Needs with Strobel Insurance
If you are interested in learning more about a car insurance policy with telematics, or if you simply want to review your car insurance policy, Strobel Insurance is here to help. Contact us today to talk about your insurance needs.
