Telematics: What Is It and Will It Cut Your Car Insurance?
What Is Telematics?
Telematics, the backbone of Usage Based Insurance (UBI), has been a buzzword over the past few years; as it has gained popularity in the insurance arena.
Progressive was one of the pioneers in using telematics to gain better insight into a potential customer’s driving habits. It started by Progressive utilizing GPS and cellular technology to obtain an indication of how many miles a customer drives and using this information to provide discounts. It has since mushroomed into technology that provides a bevy of driving related information. In addition to miles driven, the telematic black box that plugs into your car under the dashboard, can provide your insurance carrier with the following:
- When your car was used
- The amount of time you spend driving
- Your location while driving
- Your driving speeds
- Any hard breaking
- When, and how many times safety features such as automatic emergency breaking, or forward collision warning are activated
Note that the above are simply a cross-section of items carriers have mentioned they extract from telematics when reviewing a customer’s driving habits. It’s equally important to understand that when you utilize a telematics device, the device has access to virtually all data stored in your vehicle’s computer. Thus, although these are the items carriers explicitly state that they use to analyze consumer’s driving habits, they could have access to additional data.
Do You Own Your Driving Data?
Insurance Discount vs. Privacy
The introduction of telematics to the insurance market has made searching for insurance slightly more cumbersome because it provides additional options for you to choose from. Now when searching for car insurance, its best to include the potential savings (typically listed as anywhere from 5% – 50%) that could be achieved through each prospective carrier’s telematics program, in addition to the traditional options derived from rating based on your credit score, age or where you live. Several carriers have incorporated telematic programs into their repertoire:
- Progressive’s Snapshot
- Allstate’s Drive-wise
- Liberty Mutual’s RightTrack
- State Farm’s Drive Safe & Save
- Root Car Insurance (solely UBI)
The decision to try a respective carrier’s telematics program will most likely distill down to the probability you feel you will receive a discount, versus your comfort with sharing intimate driving related data with your carrier. Whichever decision you choose, make sure you compare auto pricing and coverage using EINSURANCE!