Insurance carriers are increasingly turning to technology to get a better idea of the risk profile of the customers they insure. One example, which is currently taking the auto insurance market by storm, is “telematics”. The exact details vary by carrier, but broadly speaking it involves installing a device in your vehicle, or downloading a smartphone app, which monitors your driving habits over a period of time (usually 90 days).
At the end of this period, insurance companies assess your results, factoring in your speed, how often you accelerate hard or brake sharply, and how often you drive in the dead of night when serious accidents are more frequent. Safe drivers who do not engage in risky behaviors see a reduction in their premium. Depending on the carrier, this can be as much as 20% off the entire premium. Be careful though, because several carriers INCREASE premiums for risky drivers, so it pays to chat to your friendly independent insurance agent to find out if telematics programs are a good fit for you!
The video above explains a little about Travelers’ telematics product, called IntelliDrive and launched in late 2018. Safeco (“Right Track”) and Progressive (“Snapshot”) also have similar products which differ in a few details.
Worried about data harvesting? Don’t be. These devices or apps glean only information directly relating to your driving habits. People worry about being “monitored”, but this fear is misplaced ……. if you own a smartphone or engage in any kind of social media, your data is already being used in far greater depth than with any telematics device.
For safe drivers, getting on a telematics program is a no-brainer. It is also the way of the future – by 2025 it is estimated that the vast majority of auto insurance premium calculations will be entirely or mostly telematics-based.
Safe driving out there!