Telematics: the Future of Auto Insurance?

Telematics is a technology-based system whereby insurance companies assess your auto insurance premiums based on your driving habits. The idea is to create a fairer system of auto insurance, by rewarding safe drivers with lower premiums – as well as providing a much more accurate way for insurers to assess risk.

You may know Telematics by other names such as Right Track (Safeco), Snapshot (Progressive), or IntelliDrive (Travelers). Drivers participating in the program download an app to their phone, or plug a device into their vehicle, which measures their speed, acceleration, braking, and night time driving, for a period of 90-365 days. At the end, safe drivers receive a discount from their auto premium, or a lower rate for their auto insurance renewal.

Some industry analysts predict that nearly all auto insurance policies will be primarily telematics-based within five years. It’s good news for driver safety, and also for premiums. Most carriers offer a 5% discount just for taking part in the program, with up to a further 20-30% premium reduction available on completion.

Give your agent at Memorial Insurance a call to see which Telematics program is available for your auto policy, and whether it would be a good fit for you.

Drive safe!

Rewards for Safe Drivers

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!