Usage-based Auto Insurance… What is Telematics?
Telematics (or a telematic system) is a method used to collect information about your mileage and driving habits on the road. Insurers generally use telematics data to offer personalized driving feedback, safe driving rewards and potential cost savings on your car insurance policy for safe driving.
Telematics can also come into play if your carrier offers mileage-based insurance policies (sometimes also called “pay per mile insurance”).
Telematics data is typically captured one of two ways: A mobile app on your smart phone or a small telematics device provided by your insurance company. If your insurance company provides an auto tracking device, you can easily plug it into your vehicles onboard diagnostic port. Vehicles produced after 1996 typically have this port available.
If you enroll in a telematics program with your insurer, you agree to allow the car, device or app to send this information to your insurance company.
What Are the Benefits of Using Telematics?
- Personalized Driving Feedback – Telematics data provides real time information about your mileage and driving habits. For instance, your telematics device or app records the number of miles you drive, your speed and how quickly you brake. This technology can also analyze the time of day that you drive.
- Safe-Driving Rewards and Savings – You may be eligible to get discounts and rewards just for signing up for a telematics program, as well as earn additional rewards later for being a safe driver.
- Pay Per Mile Insurance – A telematics system is also a key part of pay per mile insurance (also commonly known as usage-based insurance). If you opt into this kind of program, your insurer may track the miles you drive. You may be charged a daily base rate and a per-mile rate for each mile you drive. With pay per mile insurance, you pay for the miles you drive and not for the miles you don’t. For low mileage drivers, this often provides additional cost savings on your auto insurance. In other words, if you drive less, you could also pay less!
- Theft Protection – Telematic systems can not only track your stolen vehicle but also prevent it from starting after the engine has been turned off. A telematics system may also be able to reduce the speed of your stolen car in case of a policy chase.
- Transparent Claim Process – Accident data will help insurers to identify who is at fault, making the claim process transparent.
Technology is now in everything we do, and data availability is changing and evolving many traditional ways of our lives, including your auto insurance. Telematics can provide not only additional savings to your auto insurance but can also provide you with a play by play of your driving habits to show you where you can improve.
Please call one of our agents at iProtect today to find out more on the telematic programs and carriers we offer and the benefits it could provide to your insurance policy today!