More insurance companies are using tracking devices to figure out how much you pay. In many cases, you could end up with a discount. Keep reading to find out more.
How Is Your Insurance Company Tracking You?
Insurance companies are using a technology known as telematics. It’s a small device that plugs into your car, records how you drive, and sends the data back to your insurance company. You may have never noticed it before, but each car has a diagnostic port that’s usually on the driver’s side of the car somewhere under your steering wheel. The port is what mechanics use to help diagnose what’s wrong with your car when you bring it in, but it can also collect data while you’re driving.
When you enroll in a telematics program with your insurance company, they mail you a device that you leave plugged into the diagnostic port. It also links to your phone or some other internet connection to periodically send the data back.
What Is the Insurance Company Tracking?
The insurance company is tracking two categories of information. One is how you drive. The other is where and when you drive.
How You Drive
How you drive gives the insurance company a picture of how aggressive a driver you are and how likely you are to get into an accident. This can include things like rapid acceleration, speeding, and taking turns quickly. Braking also plays a role. Do you plan ahead and coast to a stop or slam on your brakes at the last minute, creating a greater risk of rear-end collisions? While poor driving by other drivers can sometimes force hard braking, the insurance company can compare how much you do it against the averages.
When and Where You Drive
The insurance company also wants to know when and where you drive. If you drive at busier or more dangerous times, you still have a higher chance of an accident, no matter how careful you are. This can include rush hour, late at night, and specific areas known for a lot of accidents. This may seem unfair if when and where you drive is forced by when you have to commute to work, but if you’re able to control when you drive, it can also get you a discount.
Who Uses Telematics?
Not all insurance companies use telematics, but it’s becoming more popular. Progressive, Travelers, Safeco, and Nationwide all have programs. As the devices become more common and cost-effective, smaller insurance companies are picking them up as well. At most companies, the program is optional.
What Happens to Your Insurance Rate?
Many insurance companies offer a discount just for enrolling in the program as an incentive to sign up and because the data helps them set their premiums more accurately. In many programs, safe driving can get you a further discount after you complete the program, but you won’t see an increase in your rates afterward. However, there is always the chance that insurance companies could use the data to increase your premium either now or for future renewals.
Talk to Your Insurance Agent
If you want to learn more about telematics or are interested in trying it out, talk to your insurance agent. If you’re near Delafield, WI, Billy Brown Insurance is here to help. Contact us now to get started.