By now, you’re probably aware of insurance programs that reward safe driving behavior.
Until “usage-based” coverage came along, auto insurance underwriters would traditionally use statistics to determine risk based on how you and other motorists with similar characteristics are likely to drive. With usage-based coverage, some insurers can set your premiums based on how you actually drive.
In recent years, technology has taken this pay-as-you-go concept a step further in the form of telematics-based insurance.
If you practice safe driving habits, you may be able to enjoy considerable savings on your car insurance through telematics.
“Over the years, we’ve learned that telematics is proving to be one of the best ways for insurance companies to underwrite risks as they relate to driving behavior and auto insurance premiums,” said Nick Bloxham, Vice President at SELCO Insurance Services.
What is telematics?
Telematics is a method of collecting data from a car, truck, heavy machinery, ship, etc. Think of the telematics system as a supercomputer able to record speed, braking force, fuel use, tire pressure, and more.
For purposes of collecting data from your vehicle, a telematics device is generally installed on the on-board diagnostics port (OBD II Port) beneath your steering wheel. Most vehicles manufactured after 1996 have this technology built in. If not, you can purchase a telematics device and install it yourself. Telematics is also available via mobile apps.
Tying telematics to car insurance
Insurance companies use telematics technology to offer specific plans with personalized driving feedback, safe-driving rewards, and potential discounts for their clients.
Usage-based policies vary. One insurance carrier may track only one category, while another may capture several. Before you decide, find out exactly what data each insurer will collect. With telematics-based insurance, you can earn rewards and discounts by avoiding such risk factors as:
- Braking too hard
- Driving late at night
- Driving with low fuel tank levels
- Driving with low tire pressure
Some insurance companies even offer discounts and rewards just for signing up for a telematics program. The technology, Bloxham said, is proving to be an accurate predictor of the likelihood of a motorist having an accident.
“Because this data is so valuable, many of the insurance companies we represent at SELCO Insurance Services offer compelling non-expiring discounts to those willing to try out telematics,” Bloxham said.
Ready to explore telematics and potentially save on car insurance? Contact SELCO Insurance Services to see if you can potentially be rewarded for safe driving habits.
“Even if you don’t know if you would be considered a low-risk driver, many of the companies we represent still offer discounts for marginal driving behavior,” Bloxham said. “This is where speaking with your SELCO Insurance agent makes a lot of sense. Your agent can explain the program available with your insurance company and help you make a decision.”