Perhaps you’ve heard auto insurance commercials advertising discounts for drivers who use a safe-driving device, and you’re intrigued. This blog post should help provide a broad overview of these programs – called telematics – so you can make an informed decision as you move forward. If, when you’re done reading, you’d like to learn more, we’ll let you know how to get your free quote online.
First Things First: What is Telematics?
Telematics combines data collection and transmittal with science. In the auto insurance industry, telematics refers to collecting information about the way people behave on the road to make predictions about their future losses and, subsequently, to make decisions about the cost of their coverage.
To simplify, when you choose to participate in a telematics program through your auto insurance company, you agree to “plant” a device in your vehicle that will record important details about your driving habits and then transmit those details to your insurance company. Your insurance company will use that information to determine the cost of your coverage going forward (and may even offer additional discounts for those who participate).
So How Do Telematics Work?
Right now, your insurance company knows little to nothing about the way you drive. Because they don’t have information about your specific driving habits, they have to look at other drivers who are like you to determine the level of risk you pose to the insurer. That means that if most drivers who are like you (age, gender, marital status, credit score, zip code, etc.) are at-risk drivers who are frequently involved in accidents, then the insurer must assume the same is true of you, and your premiums will reflect that.
Now, with telematics, your insurance company can develop rates based on your own driving habits, encouraging you to make the safest possible decisions behind the wheel and keeping your car insurance rates low and fair - perhaps most important of all!
What Information Will My Car Insurance Company Get?
The question we hear most often is, “What will they know about the way I drive?” All of this information will be outlined in detail in your policy – and it’s important to read that because each company wants different information – but the most common things we see insurers collect include:
- Which zip codes you drive in most often; are they zip codes with frequent accidents or zip codes in which accidents are rare?
- How many miles you put on your car each day; drivers who drive the most pose the greatest risk.
- What time of day you drive (and the risk of accident during those time frames)
- How often you engage in high-risk behaviors like speeding, hard braking, and sharp turns
- The events leading up to an accident – extent of impact, likelihood that someone has been injured in your vehicle or another vehicle, and the location and extent of damage to your vehicle
Why Explore Telematics?
Telematics can help you drive safer and achieve lower rates at the same time. To learn more or request a free quote online, visit us at our St. Paul or Virginia, MN, locations today!
