After touting the benefits of telematics to my insureds for the past decade I have gone ahead and signed up and downloaded the app and am earning cash! I would have jumped in sooner but the carrier I have had my insurance with for 25 years did not offer telematics.

Telematics is a way for an insurance company to collect specific data about your driving habits via a plug-in dongle or smart phone app. Every company that uses telematics looks at a different set of data points and weighs them differently, at a high level the major factors transmitted and evaluated are;

• Speed: Are you maintaining safe speeds based on posted speed limits?
• Braking habits: Do you brake gradually or slam on the brakes?
• Acceleration: Are you accelerating smoothly or darting off at green lights?
• Time of day: Are you mostly driving during daylight or late-night?
• Mileage: How far and how often do you drive each week/year?

The benefits of telematics are that you are receiving a premium that more clearly relates to your driving habits. Prior to Telematics generalizations were used in creating your rate. Garaging location, age and gender of operators, year make and model of vehicle(s) and your prior driving record were the most common factors used. Clearly within these large groups driving habits can be very different but the baseline premiums were the same for operators within that defined group.

While most insurance companies will advertise savings of up to 40% the Consumer Federation of America states savings are closer to 10% while insureds with youthful operators earn on average a higher savings. In my case I saved just under 10% for signing up and I earn cash back based on my driving habits throughout the year. At renewal my habits will be reevaluated and I may receive additional credits.

 There are clearly privacy issues that every insured must evaluate prior to signing up for a program like this.  While most insurance companies state they will not sell your information they are probably selling aggregated data. I felt the value was there based on several items from passing a license plate reader every time I pull out of my development to the fact my car has a black box (event data recorder) that is capable of tracking many of the items that the insurance company’s telematic device does, so “big brother” already knows and my insurance premium was not being reduced. 

To learn more about telematics or to review your current automobile insurance policy, contact the Trusted Choice Agents at Richey-Barrett Insurance.