Can Telematics Help Me Save On Car Insurance?
The next big thing in car insurance is here and is already at work in the industry: Telematics. You may have seen references to a little “black box” in insurance commercials; Progressive is one company that comes to mind (“Flo” plugs it into the bottom of the steering column). That black box works constantly to monitor your driving habits and relays that information back to the insurance company; that’s telematics, a means of monitoring your car.
How Does it Work?
For insurance purposes, the box specifically tracks your speed, how many miles you drive, how hard you apply the brakes, rapid acceleration, and the time of day you drive. These are all indicators used by estimators to assess risk, and that is the basis for your premium rate. That black box knows when you’re speeding and by how much, how often you jam on the brakes to avoid a fender bender or pedestrian, what part of town you drive in, and whether you drive in heavy or light traffic.
How does it know all this? The technology behind telematics, in simple terms, is a blend of GPS system and onboard analysis. These components work together to track the exact location of a car, as well as how the engine and electronic parts are behaving, which is enough for insurers to get a good picture of your driving skills.
How it Affects Your Driving
Because that box knows every corner you take too fast, every light you have to slam on the brakes for, and every time you drive above the speed limit, you might feel like you’re being watched. That’s because you are, in a way. Just knowing that the black box is literally recording every move you make behind the wheel is enough for many drivers to correct their bad habits.
An insurance industry survey of more than one thousand drivers who had the black box installed in their cars reports that more than half of the drivers altered their driving habits; 18 percent admitted to making big changes, while 36 percent agreed to make small changes.
A big plus to installing the black box is that an individual’s driving habits, which are now lumped together with everyone in the same age group, can be assessed separately. This is great news for good drivers in their 20s because they belong to an age group that, in general, pays twice the amount in premiums than most drivers over 30.
A word of warning: You should commit to practicing safe driving habits at all times. Ask a friend for an honest assessment of your driving habits before you chose this type of insurance. If you don’t take driving seriously at all times, it’s going to show in your black-box data and you could end up paying more instead of less.
Not all insurance companies currently offer insurance based on driving habits. If you’re interested in this type of policy, you can use the Internet to connect with those that do. Use a website such as www.carinsurancecheap.net to make it easy on yourself. This site sends your information to several insurers, who will follow up with you.
New Uses for Telematics
Information analysis expert HIS Technology reports that, by the end of 2018, 80 percent of all cars sold in the U.S. will include embedded telematics (and that figure is considered conservative). Consumers will, however, still be able to choose to whether and how their data is used. The basic technology has been in play since 1996 when OnStar debuted in General Motors cars. The service uses GPS technology to offer driving directions and roadside assistance, as well as anti-theft features.
Telematics provides for many different uses, from monitoring company fleets to tracing stolen vehicles. In coming years, we will see it used to deliver “connected-car” services such as live traffic and weather updates, apps, and voice-activated features. It may even go so far as to include Facebook integration.
Motorists will also be able to enjoy security features provided by the technology that includes instant notification to AAA (or other agency of your choice) when your car breaks down. Along with sending technicians to help, telematics will provide them with diagnostics from your car, so they will have a good idea about how to fix the problem when they get there. And that saves you time and money.