The goal of any insurance provider is to assess the risk that a driver presents, as well as the likelihood that he or she will eventually need to file a claim. While there is no way to predict the future, insurers are taking advantage of modern technology to better determine the driving habits of policy-holders. With telematics, some drivers are paying lower auto insurance premiums than they ever have before.
What are Telematics?
Telematics are digital tracking devices installed on a vehicle to monitor driver speed, acceleration, and sudden braking. Though these devices are optional, there are benefits to allowing insurers to track driving information.
These benefits usually translate to auto premium savings for insured drivers — especially those with a history of insurance claims or traffic violations. Drivers in high risk groups, such as teenagers and the elderly, can also benefit from telematics. Insurers receive actual data for each individual driver instead of relying solely on statistical information and driving records. For those who drive safely, this can mean significant monthly savings.
Telematics are also making it possible to pay for auto insurance on a pay-as-you-go basis. In other words, drivers who operate a vehicle only on the weekends or for leisure may find their premiums decrease as digital tracking devices report less time behind the wheel. This is advantageous for anyone with sporadic driving habits, such as a student home from college during the summer or a retired person who only goes to and from the grocery store.