The more information a car insurer has about you, the better, right? Insurance agents usually base prices and coverage on the amount of risk a driver presents. Those with little risk usually pay less. Those who are more likely to be in an accident pay more.
But, how do insurers know how much risk you present? One way they are learning is through telematics. It is a method of connecting drivers with insurers to track key areas of risk. Could it save you money?
How Car Insurance and Telematics Link
Some auto insurance agents are offering mobile telematics programs for customers. The process is easy. Those who have internet connectivity in their vehicles can use it. Sometimes, the program uses a mobile app.
The goal here is to track key areas of risk. Telematics is a type of Internet of Things (IoT). The app or connectivity tool sends information back to the insurer. The auto insurance company can then see what you are doing. And, they can use this to estimate your risk. This might have an effect on your insurance coverage.
Here’s an example of how it might work.
You buy a vehicle with OnStar technology or a similar product. You let your auto insurance provider tap into the data from that app. After six months or so, the agencies do just that. They quickly learn you do not speed. You seem to be a safe driver; or, you do not drive many miles on a regular basis. This usually shows you are a low-risk driver. It may mean your car insurance will cost less as a result.
This type of connectivity and shared information is empowering insurers. It allows them to do more than just offer discounts. For example, this information can help agents determine the type of coverage you need. For example, if you are a higher risk driver, you may need more liability insurance. If you drive infrequently, you may not need as much coverage.
This type of data sharing can be a good thing for consumers. It gives you a chance to pay less because you may not be a high risk to the insurer. Why pay for someone else’s reckless behavior?
Not all auto insurance agencies offer this type of service yet. However, more are expanding telematics offerings to gather data. Ultimately, this type of service can change the way you protect your vehicle and manage your budget. For more information on coverage and telematics offerings, contact one of our agents.