Introducing telematics: a brand new way that insurance companies can adjust auto rates. Telematics solutions make it possible for auto insurance companies to determine whether you’re a safe driver, by identifying the hallmarks of safe driving: braking softly, maneuvering well, and driving the right speed for the conditions. Here’s everything you need to know about this new technology that national companies such as Nationwide, Progressive, and more are now using.
The Pros of Telematics
In Arizona, there are 127,000 accidents a year, and a lot of these are caused by high risk or bad drivers.
Before, insurance companies had to use fairly basic information to determine your auto insurance rates. For instance, if you were a male between the ages of 18 to 24, you probably had high insurance rates. That’s because people below the age of 25 get into a lot of accidents; they’re still getting used to driving, and they generally take more risks.
But, what if you’re a safe driver, even despite your age?
This is where telematics comes in. Telematics can tell your insurance company what kind of driver you are, beyond demographics. In that way, it operates a lot like a health check-in for a health insurance company.
Telematics doesn’t just do that, though. They also tell you how safe a driver you are so that you can adjust your driving. And if you ever get into an accident, telematics can show that you were stationary or driving safely during that time.
Telematics is so advanced today that they’re radically changing the way insurance companies charge their customers. In the future, telematics may be used to create completely granular insurance rates, based on your long-term driving history. Today, they’re usually used to give specific “safe driving discounts” that can supersede being in a high-risk group, such as being younger or older than the average driver.
The Cons of Telematics
Now you may be wondering if there are any downsides to telematics. In fact, most of the concerns people have about telematics have already been addressed.
Telematics does require that you install an app on your smartphone or a device in your car. Smartphone apps aren’t entirely accurate yet. So you might have to review your telematics data. The devices are more accurate, but a little rarer; they’re just coming into vogue. But though they do take personal information, this personal information is locked between you and the auto insurance company; it is protected.
You might think that one of the cons of telematics is that you could get a higher rate because you’re a “bad” driver. Maybe you speed a little more than you should or take corners a little faster than you should. Telematics systems generally don’t increase your rates. They’re purely used for discounts. So you shouldn’t be afraid of installing a telematics system!
Some may be a little wary about using telematics because it does track where you drive and how you drive, which can feel invasive. Luckily, no company requires telematics. Telematics is an optional way to get a discount, not a reinforced requirement to get insurance.
Are you ready to find out more about how telematics can help you get better rates? The insurance industry is constantly coming out with new and interesting technology. Contact The Harnish Insurance Group today to find out more about how telematics is being used in Arizona.
