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How Your Driving is Impacting Your Insurance

Posted by Denise Russo on Jun 12, 2024 12:29:25 PM

Your driving has more impact on your insurance rates than you might think, thanks to the revolutionary technology known as telematics. Telematics was initially introduced to enhance road safety by monitoring driving compliance with regulations. However, it has since evolved into a sophisticated system that not only tracks driving habits but also can significantly influence insurance premiums. This technology now plays a crucial role in determining insurance costs for many carriers, as it analyzes drivers' behaviors to estimate the driver’s risk. Along with records from the past three to five years, telematics brings your driving habits to the forefront of your risk analysis. We'll investigate how telematics shapes our driving experiences and unpack its connection to road safety and insurance rates.

How Does Telematics Work?

Telematics leverages GPS technology and onboard diagnostics to gather data about how, when, and where we drive. This data isn't about where we're going; it's about how we get there. And insurers are using this wealth of information to tailor insurance premiums more accurately to individual risk profiles.

Telematics can be installed in two ways: through an actual device implemented into your vehicle or through an app. Most insurers utilize the app for passenger vehicles, whereas commercial cars and trucking fleets typically utilize an actual device. Both use GPS for tracking purposes.

Driving Behavior Metrics

Telematics is used to track a wide variety of driving behaviors and car usage, including:

  • Speed: Telematics systems monitor how fast you're driving, both on highways and in urban areas. Excessive speeding can indicate risky behavior and may lead to higher insurance premiums.
  • Acceleration and Braking: Sudden accelerations and harsh braking can suggest aggressive driving habits, which are associated with increased accident risk. Telematics devices record these events to assess driving style.
  • Cornering and Turning: Sharp turns and aggressive cornering can also indicate risky driving behavior. Telematics systems track these maneuvers to gauge driver confidence and skill.
  • Mileage: The number of miles driven is crucial in determining insurance premiums. Telematics devices accurately record mileage, allowing insurers to offer pay-as-you-drive or pay-per-mile insurance options.
  • Location: Your location while driving can also impact your insurance premiums. Telematics devices use GPS technology to track where you drive, including specific routes and destinations.

Advanced Telematics Features

Many telematics systems can track aspects of driving and vehicle usage beyond standard elements like speed, turning, and acceleration. In addition to these basic metrics, advanced telematics systems may incorporate other features such as:

  • Vehicle Health Monitoring: Some telematics devices can monitor the health of your vehicle, alerting you to potential maintenance issues before they become costly repairs.
  • Safety Alerts: Telematics systems may provide real-time safety alerts, such as warnings about hazardous road conditions or reminders to buckle up.
  • Phone Usage: Telematics apps may track when you use your phone while driving, with a higher frequency indicating a higher risk for insurers, especially in hands-free states.

It's important to understand what aspects of your driving your carrier's telematics system will track, as these measurements will impact your insurance premiums. Regardless of these impacts, drivers should always practice safe driving behavior.

Benefits of Telematics

Telematics can offer a lot of benefits to drivers, ranging from potential cost savings to heightened safety awareness. Safe drivers can get lower insurance premiums, as responsible behavior behind the wheel is reflected in driver profiles. Additionally, for those who drive less frequently, telematics-based insurance programs like pay-as-you-drive (PAYD) or usage-based insurance (UBI) can offer significant savings by aligning premiums with actual mileage. The insights provided by telematics devices can help drivers become more aware of their driving habits, encouraging them to adopt safer behaviors and reduce the risk of accidents. Telematics offers financial benefits and contributes to a safer and more conscientious driving culture on our roads.

Are Telematics Optional for Passenger Vehicles?

Many insurance carriers offer telematics programs, but whether you participate is entirely up to you. You can choose to join the program and take advantage of the benefits it offers, such as improving your driving record and potentially lowering your insurance premiums. Telematics can provide valuable insights into your driving habits, especially if you're a safe driver with a clean record in terms of collisions and tickets. However, if telematics isn't your cup of tea, you can opt out at any time. Before deciding, it's a good idea to check with your insurance carrier to see if they offer a telematics program and to discuss the details of each program to determine if it's the right choice for you. The decision to participate in a telematics program is yours to make based on your preferences and driving habits.

Securing the Best Auto Insurance Rates

Securing the best auto insurance rates might seem daunting as rates continue to rise, but there are ways to lower your costs. First, shop around and compare prices from multiple insurance companies to find the best deal. Next, consider bundling your policies. Many insurers offer discounts if you purchase multiple types of insurance from them, like auto and home insurance. Another way to lower your rates is by raising your deductible, which is a good option for those with a strong driving history. And finally, take advantage of any discounts you are eligible for, like safe driver discounts from telematics tracking. With a bit of research and some smart decisions, you can secure the best auto insurance rates without breaking a sweat.

Auto Insurance with ECBM

Whether you need auto insurance for your personal vehicle or commercial coverage for a fleet, ECBM can help. Our team has extensive experience with auto insurance and understands the latest trends in coverage, discounts, and rates. If you're interested in utilizing telematics for your vehicles, we work with multiple carriers who offer these programs on a personal and commercial level. For more information on how we can help you secure the best auto coverage, contact us today.