Throughout hundreds of human generations, our technological advances have continued at an exponential rate – the fact that we’ve gone from telegraphs to telephones to telematics in less than 200 years seems astounding until one considers that we’ve gone from the Bronze Age to the Digital Age in just over 3000 years. Wait, you’ve never heard of “telematics”? Ok I’ll explain. First, the abridged version: telematics are devices that, when installed, allow a vehicle to communicate telepathically with an insurance carrier. Actually, I’m sure I’ve probably created more questions than I’ve answered here so I’ll go into a bit more detail…
Telematics systems can come in the form of a plug-in that sits in the vehicle’s OBD-II Port, or more recently they can even be a camera, directly monitoring the driver. They transmit data to the carrier or monitor, some of which would normally just be recorded to the vehicle’s computer – for example: speed, hard braking events, distance and average duration of trips. These can be designed by a carrier itself, or created by a third party, with the option of reporting the results to your insurance carrier.
I can almost hear you thinking to yourself “Why would I ever want this set up on my vehicles? It could get me into trouble and make my price go up!” Not necessarily. It can also directly affect some of the factors that drive the cost of your policy in a *positive* way too…
Are you driving for business, and all of your deliveries local? Your carrier may offer a better rate for low mileage (not always the case with commercial vehicles but very common with personal ones). If your system proves that your drivers don’t break the speed limit, or if they’re sophisticated enough to pick up when a driver is getting drowsy and sound a warning to keep things on track, it isn’t just working towards a discount, it’s preventing accidents before they happen, just like having a good copilot on board.
Some carriers even offer adjusted rates for drivers who do most of their driving during off-peak hours. Maybe now you work from home, and do your shopping once a week after dinner. In this case you’re probably looking at better rates than a typical commuter.
Now before you rush to your phone to ask your account manager if you too can plug into some savings, I also have a few recommendations. First and foremost, take an honest look at your driving habits. If you’re driving your personal vehicle more than 15,000 miles a year, and doing so during peak hours, this program might do more harm than good, as you’re essentially reporting to the carrier that you’re a bit more of a risk than they might have realized. The same goes for you if you’re the type to live on the edge of your brakes.
Another thing to consider is your vehicle itself. Can you plug a telematics device into your ODB-II port and leave it there without any issues? When I worked for a direct writer that used a similar plug-in, we occasionally had customers report problems with their car’s computer, drained batteries, etc. If your vehicle is relatively new, ask your dealer. If not, ask the internet (social media isn’t ALL bad!).
Finally, if you’re ready to give this a try, call your insurance agent up (hopefully it’s us – if not then you have TWO reasons to call us now!) and ask if your carrier offers this type of discount AND what factors they base it on. Do they offer a plug-in OR can you download an app on your smartphone and simply connect that to your car? There are many more possibilities now than even existed just five years ago. Half of my friends have “smart watches” that can connect to their phone and some of the newer cars… I could go on but I think you get the idea.
Just be sure to weigh the pros and cons when deciding if this option is right for you. You might be ready to join the next wave of the future – or maybe you’d rather give it a few more renewals.
