Insurance companies use demographic characteristics as factors when setting the rates that individuals pay for automobile insurance. As a result, young adults often find themselves paying more for insurance simply because of their age. Technological developments now make it possible for individual drivers to prove they are a safer driver than the average member of their demographic group.
If you are interested in lowering the cost of your car insurance, consider a policy that is based on real-time data received as you drive your vehicle. An insurance telematics device can be attached to the onboard computer that controls the operations of your vehicle. Information about your driving habits is then sent from the telematics device to your insurance company.
Telematics is a blended word created from the combination of telecommunications and informatics. Although apps have been developed to transform a smartphone into a telematics device, the typical connection point for a telematics device is the onboard computer. The same computer port used for engine diagnostics or emissions testing is used to connect the small telematics device.
Real-time vehicle data
The typical telematics device relies on both satellite and cellular technology. GPS calculations are used to determine the location and speed of your vehicle. Your driving habits in regard to acceleration and braking are also measured. The data about your driving patterns is then sent to a nearby cell tower and onward to the insurance company. A telematics device does not affect the normal operation of your car.
Because of the many sensors in a vehicle, a useful amount of information can be derived from a telematics device. Many automobiles produce a brief audible tone if the driver's seat belt is unfastened during operation. Your history of seat belt usage may be collected, as well as data concerning fuel consumption and engine idling time.
Usage-based auto insurance
With the telematics device plugged in, an insurance company can provide a type of automobile insurance known as usage-based insurance (UBI). The use of telematics devices is expected to grow as more consumers seek innovative options to lower their insurance premiums. About 70 percent of automobile insurance providers are expected to offer UBI coverage by 2020.
There are additional advantages of using a telematics device. Smoother vehicle acceleration is likely to result in improved fuel economy. The intent to reduce insurance premiums may prevent an accident from occurring in the first place. Contact an automobile specialist for more information on telematics and insurance.