Should You Consider Telematics or Usage-Based Insurance?
Traditional Automobile Insurance costs are based on factors relating to your vehicle and driver profile, neither of which have to do with your day to day driving habits. However, telematics technology is a method used by some insurance carriers to collect day to day information about your driving habits such as how you drive, when you drive and where you drive. The data collected is used to offer personalized driving feedback, safe driving rewards and potential cost savings on your Automobile Insurance.
While many insurance companies now offer a telematics program, no two are the same. Carriers typically track a combination of the following:
- Time of day
- Distracted driving or phone usage
Most insurers provide an up-front discount for enrolling and participating in the program. Some carriers require you to download an app on your mobile device, while others send you a device in the mail to be plugged into your vehicle. Some late model vehicles are already integrated with this technology installed by the manufacturer. Some companies track your driving habit for a specified period, while others require you to always be tracked.
Since the goal is to become a better driver, these programs often alert you when you brake too hard or take a corner too fast. Most programs also provide detailed information throughout the process via a mobile app so you can monitor your driving habits and identify areas that could be improved.
Based on your driving characteristics, you may qualify for a lower insurance premium. Riskier driving habits can result in higher premiums. Telematics allows insurers to more accurately price premiums and gives the consumer some control in their rate.
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