How Telematics and Usage-Based Insurance Programs are Changing the Game
The cost of car insurance is influenced by numerous factors, among which is your driving behavior. Traditionally, insurers would assess your driving record to get an insight into your driving habits. However, with the advent of car insurance tracking devices, they can now monitor your driving behaviors directly, using these insights to determine more accurately adjusted insurance rates.
If you are seeking affordable car insurance rates, you may have come across various usage-based insurance programs that employ these tracking devices. Such programs are growing in popularity because they can potentially lower car insurance rates for safe drivers or those who don’t drive frequently. But is it advisable for you to enroll in a car insurance tracking program?
It’s crucial to comprehend how these devices function, what data they gather, and how they impact your rates before making a decision.
An insurance tracker is essentially a telematics system that records your driving behaviors. There are two primary types of auto insurance trackers: a physical telematics device, or dongle, that you install in your car, and a smartphone app. The choice between these options often depends on your insurance provider and the program you select.
Whichever type you decide on, the insurer will use the device to collect specific data about your driving habits. These devices are usually supplied as part of a usage-based insurance (UBI) scheme, where they capture important metrics like speed, braking, and mileage to compute a tailored premium.
The Progressive Snapshot program was the first of its kind in the United States, but since then, other insurance companies have launched similar programs. Now, customers can choose from a variety of driving tracking programs, including Allstate’s Drivewise, Geico’s DriveEasy, and State Farm’s Drive Safe & Save.
Joining these tracking programs is optional, and you must consent to using the dongle or app to track your driving. If the program does not result in savings, you should be able to withdraw without any problems. However, bear in mind that every insurer has its own set of program rules and restrictions, and if you decide to stop participating, you should notify them. Removing the device or discontinuing the use of the app can influence your premiums or nullify any discounts.
The operation of an auto tracking device varies based on the technology your insurer uses. If they use a standalone device, it’s generally connected to your onboard diagnostic (OBD-II) port, usually located beneath the steering wheel. The device gathers information about your vehicle usage and driving behavior from the car’s onboard diagnostic system and a series of sensors.
However, if your insurer utilizes a mobile tracking device, you simply need to download the app, follow the instructions provided, and start driving. While it doesn’t directly access the data from your vehicle’s OBD-II port, the smartphone app uses inbuilt phone sensors to record data on your driving habits, such as sudden acceleration and hard braking.
Regardless of the tracking method, the data gathered is generally encrypted and sent to the insurer for assessment. This information aids in evaluating your driving behaviors, determining your rates, and identifying any eligible discounts or program benefits.
Insurance companies offering tracking programs typically disclose what data is gathered, and this information can usually be found on their website or by speaking to an agent. The collected data often includes:
- Frequency and duration of drives;
- Hard braking;
- Rapid acceleration;
- Speed Quick, sharp turns;
- Nighttime driving;
- Phone usage while driving.
The insurers use mapping data along with the collected information to evaluate your adherence to traffic rules and your overall driving habits. They may also detect if you are using your phone while driving, a practice deemed as “distracted driving.”
Your insurer uses this data to determine your premiums. However, the data can also be beneficial for you. For instance, many smartphone apps provide a dashboard and feedback on your driving habits. By observing patterns of sudden starts and distracted driving, you can modify your behavior, potentially improving your driving skills and, subsequently, your auto insurance rates.