In 1998, Progressive Insurance became the first automotive carrier to use what’s called telematics to track its policyholders’ driving habits, and other major insurers followed suit.
According to The Idaho National Laboratory, telematics are defined as a “combination of computer science, telecommunications,and vehicles, with the goal of controlling a vehicle or collecting vehicle data.” Many car insurers offer policyholders the opportunity to have a telematics device installed on their vehicle in exchange for policy discounts. The telematics devices record things such as miles driven, speed traveled, cellphone usage while driving, acceleration and braking, and times of day driving. Based on the data collected, the insurance carrier can determine what type of risk your driving may be and either reward or penalize you in the form of policy premiums. This is known in the industry as usage-based insurance.
Are the potential discounts worth it? Depends upon whom you ask. Many major insurers claim policyholders who install their telematics device can receive an initial 10% discount on their policy premiums. However, some have expressed concerns about what else may be done with the driving data collected, such as selling it to advertisers or having it used against you should your vehicle(s) be involved in an accident.
Getting the best value for car insurance is a major concern. Johnston & Associates’ independent agents’ combined quarter century of experience has helped Middle Tennessee residents stretch their car insurance dollars to fit their driving needs and their budgets. Contact Scott and his team today for a customized solution.