If you're like many auto insurance customers, you might have never heard of telematics before. A relatively new concept, telematics are the devices and communication protocols that can transmit information over long distances--often in real time. In your home, you might have a smart thermostat or smoke detector that already does this in some way.
This concept is changing the landscape of auto insurance premiums as well as home safety and energy efficiency. Best of all, telematics can save you a lot of money if your driving habits are up to the task.
Telematics in Cars and Trucks
Currently, your auto insurance premiums are based on a number of factors, such as your chronological age and your driving record. Some of these statistics are extremely useful for informing the cost of your insurance--if you have a number of speeding tickets, you're probably a higher insurance risk than someone with a spotless record. Other metrics, such as gender, aren't nearly as useful and often penalize some customers.
With a telematic device, your driving habits are transmitted in the form of statistics to your insurance provider. This process creates a more accurate picture of your insurance risk over the time you've spent driving your vehicle. As a result, your premium becomes something you have direct control over.
What Telematic Devices Measure
To create an accurate picture of your driving habits, a number of statistics must be used. The categories that this information falls under include:
- Time of operation
- Average speed
- Instances of hard brake application
- Hard cornering
All of these behaviors lead to a specific risk category. If you rarely travel at high speed and almost always drive during low traffic time periods, your insurance should probably cost less than someone who barrels through rush hour traffic. At any rate, that type of information is much more useful in determining risk than your age or marital status.
Why Telematics Aren't Everywhere Yet
Even though telematic devices benefit the insurance providers and most drivers, they aren't widespread yet. The biggest reason for this is privacy. Some drivers have a difficult time with the idea that someone could know every time they violate a speed limit law. Persistent tracking is certainly daunting in this regard.
The other issue lies in the telematic device's vulnerability to outside attack. Hackers could, conceivably, compromise a telematic device's integrity and tamper with a driver's data. However, the likelihood of this happening in practice is quite low.
Telematics are slowly changing the landscape of auto insurance as we know it. If your provider offers a telematic device option, consider taking it on. You'll usually receive a premium discount for enrolling in the program, and the constant emphasis on safe driving behaviors will improve both your driving experience and your insurance rate.