Telematics Insurance

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Telematics and usage-based insurance measures your driving risks in real time.

What is telematics or usage-based insurance?

Telematics, also known as usage-based insurance, uses monitoring devices and technologies to track and report driving and vehicle movements in real-time. Insurers use telematics to measure mileage and driving habits. This can help determine if a policyholder qualifies for discounts on their premiums or other incentives for safe driving. Telematics can be used for personal auto insurance policies, as well as commercial auto insurance, fleet insurance, and logistics.

Here’s how it works.

There are a variety of technologies and devices used for capturing telematics data. For example, tracking equipment may be pre-installed by a vehicle manufacturer or available on a mobile app, Bluetooth beacon, or plug-in device on a vehicle’s onboard diagnostics (OBD) port. A telematics device can track the driver’s GPS location, mileage, fuel consumption, and time of day. Additionally, it can give insight into driving behaviors such as rapid acceleration, hard braking, speed, and distracted driving.

Telematics have advantages for drivers.

Using telematics can be beneficial for the insurance company. For example, it can help identify attempts at insurance fraud and gain insights on demographics and markets. Policyholders sometimes argue that telematics makes them feel like they’re being watched or someone’s trying to catch them driving badly. However, there are many benefits for drivers when telematics are used. Some advantages include:

• Safe driving scores can save money.
• Premiums can be developed based on real habits.
• There may be incentives for less time on the road.
• Drivers can gain awareness of driving behaviors.
• Tracking vehicle habits can assist with scheduling preventative maintenance.

Is it time to switch gears?

Telematics is a driving force behind safety. It can also help create optimal driving conditions for everyone on the road. It can improve driver habits, reduce accidents, help maintain vehicles, and keep drivers accountable. Often, drivers who spend less time on the road and have safe habits tend to find the incentives worthwhile. And, many tend to welcome the use of telematics as part of their auto insurance programs.

Are you considering telematics or usage-based insurance? Contact us today to learn more about your options.