Telematics and Car Insurance: What You Need to Know

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You may have heard the term telematics before, but you might not be familiar with exactly what it means. At the same time, you also aren’t sure what it has to do with car insurance in Salt Lake City. But today, we’re going to fill you in on some important information about telematics and car insurance.

What are telematics devices?

Telematics refers to the mix of telecommunication and informatics. While telematics devices are commonly used in logistics and fleet management fields, they’re more and more popular in the auto industry as well.

In relation to car insurance, telematics offer a form of usage-based coverage. These devices are used to gather information about how you drive, and we’ll discuss that more in a minute.

Interestingly, the number of vehicles with telematics devices is estimated to have doubled in recent years. In fact, most vehicles built after 1996 have telematics capabilities built into them as part of the car’s on-board diagnostics port (OBD II Port). So, if your vehicle was made after 1996, there’s a good chance it has telematics capabilities.

What information do these devices gather?

Depending on the specific device, there’s all kinds of information that can be gathered by a telematics device:

  • GPS tracking
  • How much and how far you drive
  • How quickly you brake
  • Speed
  • The time of day you drive
  • If your airbags have been deployed
  • If a vehicle has been in an accident

How do telematics devices affect car insurance?

Telematics programs are becoming a more common offering from insurance companies to their clients. If a client has telematics devices built-in or installed in their vehicle, there’s a chance it could save them money on their policy!

How it works

Insurance companies may offer safe driving discounts to drivers whose behavior is tracked via a telematics device. The data can show if the driver follows speed limits, doesn’t brake hard, and drives most often during daylight hours, all of which can deem them a “safe driver.” With this distinction can come a lower premium.

In addition to insurance benefits, there are other good reasons to consider a telematics device. If you have a habit of braking hard or driving too fast, a telematics device can also be used to help you become a safer driver. It can give you reminders to brake gently or follow speed limits, and you can get this information delivered right to your smartphone.

These are just some of the ways telematics and car insurance merge. Are you interested in learning more about what a telematics device could do for you and your policy? We’d love to talk! Give us a call today.

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