Telematics Makes For Smarter Car Insurance

We live in an age where technology is creating waves of changes in the world and it’s now influencing the policies car insurers write up to insure vehicles. The technology in reference is Telematics.

What is Telematics?
Simply put, Telematics is the combined relationship of your GPS system and your vehicle’s onboard diagnostic system (OBD). Car insurance companies are taking advantage of these systems to map out the details of your vehicle from its speed and location to even its health.

How does it work?
Your insurer does this by providing you with a dongle which is plugged into your vehicle’s OBD. The dongle then provides your insurer with information, over a mobile network, about your car and your driving behaviour. Your insurer then analyses the data and communicates the information to you via its company specific app. You are typically rewarded for a safe driving style, gradual acceleration, staying below the speed limit and non-aggresive behaviour. Speeding, swerving and racing your car is also flagged as higher risk, and your premiums will no doubt be adjusted. They can also notify you of things such as battery and engine health, as well as detailed driving summaries and advice on how to improve your driving.

You’ll have access to additional features (if you opt-in for them) such as alerts for driving over the speed limit, being notified when you need to renew your vehicle’s license, and when your vehicle needs to be serviced. You can even opt-in to a feature called Geo-Fencing whereby you set geographical boundaries in which your car should drive within. It’s particularly useful if you have a fleet of cars that should stay within a certain area of your business, for instance, a company that has delivery vehicles that should only be doing deliveries within a certain area.

Before Telematics, car insurers had to rely on static information to determine a person’s insurance premium. A personal risk profile is used to determine what kind of behaviour is commonly associated with your life stage. A high-risk 20-year-old will pay more than a lower risk 50-year-old. Gender, age and location are prime determining factors and then to a lesser extent the vehicle itself. This includes the make and model of the vehicle, how old it is and even colour. Now, with Telematics, insurers have access to real-time information, which provides individuals with the opportunity for cheaper premiums based on how well, or poorly they drive.

Conclusion:
While Telematics as a technology is fairly new to the car insurance industry, it’s been used in the Formula 1 scene for a number of years. The benefits that Telematics provides are too good to pass up, which is why the vehicle insurance industry has started using it.

Now you’ll be able to access the benefits by simply visiting and submitting the form with your details. You’ll get a call from an insurer who will be able to tell you more about Telematics and how it can benefit you.

Staff Writer