It’s Watching You: The Future of Driving With Telematic Technology

It sees you when you’re driving. It knows when your tank’s on E. It knows if you’ve been bad or good, so how do drivers feel about this emerging technology?

If you’ve used GPS, hands-free devices, emergency communications services for your car, or automatic driving assistance programs, you’ve employed telematics technology. A combination of telecommunications and informatics, vehicle telematics transmit data from your car’s computer to a remote location. It has been used commercially for trailer and container tracking and personally for vehicle tracking and wireless vehicle communications for years, but the use of telematics in the auto insurance industry is a newer frontier that’s making waves.

Meet your new co-pilot

The use of telematics for auto insurance purposes was first introduced by Progressive Auto Insurance’s Snapshot tool in 2013. Giving policy holders the incentive of receiving up to 30% off premiums for installing one of these devices, it acts like a fly on the wall to one’s driving. “Good” drivers will never hear a peep. However, if one breaks suddenly or the tool detects erratic driving, it will beep to warn the driver.

The whole idea is that the more the tool beeps, the worse the report. As you can see, this could mean big changes for insurance premiums depending on how one drives. Keep in mind, if the device beeps at you, it doesn’t mean you can’t get a good discount. Many of the highest discounts come to drivers who listen to the telematics devices and adjust their driving within the trial period.

Programs like Progressive Snapshot target some of the highest risk behaviors. Many are also easy to correct if you pay attention to them.

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How Do Telematics Programs Affect Auto Insurance?

You’ll be hard pressed to find a new vehicle today without some form of telematics technology built into its computer. While this excites the auto insurance industry, skeptics worry about the implications for consumers.

UBI, or usage based insurance, is one of these concerns. UBI has been around for about 10 years and started as a means to reward drivers with lower premiums for traveling less distance. (Progressive’s Snapshot is one of these UBI devices). The difference today is that now UBI technology also tacks on information about how a driver is driving. This makes previous “fixed” plans more susceptible to fluctuation and added costs. It also raises privacy concerns and risks of being hacked.

What Do Consumers Love about Telematics Like Progressive Snapshot?

Although some see this technology as a harmful and “big brother” type monitoring system, others view it as a big bonus when it comes to personal protection, complete account customization and cost savings.

After an accident, tools like Snapshot can act as a silent witness and prove if another driver was at fault or attempted to commit fraud. Telematic tools will also make it possible for exceptionally safe drivers to pay a lot less in premiums since worse drivers will be paying more.

These tools also have the potential to increase road safety by giving drivers incentive to drive more responsibly, stop texting and driving, and think twice about dangerous maneuvers. With the development of UBI policies, drivers will cut down on how driving they’re doing too helping the environment by reducing emissions as well as alleviating traffic jams and congestion incidents.

Some programs work through an app on your phone. Other usage-based insurance programs work through a plug-in device that goes in your car.

Programs like Progressive Snapshot often offer a small initial discount. Then they give you a bigger discount that could last as long as you stay with that insurance company based on your driving after 90 days. Once the 90 days is up, you can take it off your phone without paying more.

What will the future hold for insured drivers?

The jury is still out on whether auto insurance telematics will fall to the forces of good or evil, but we will soon find out. By 2020, 36 percent of all auto insurance companies are projected to be using telematics. All we can do in the meantime is watch this technology as closely as it’s watching us.

As we go along, more people will use it to monitor speed limit, driving habits, etc. Things like time of day may become less important, especially for shift workers who have to be on the road during high risk hours. For many good drivers who have a recent incident on their driving record, this is the perfect way to cut to the front of the line. Instead of waiting for that accident to fall off your record, you can show insurers you have safer driving habits now and pay auto insurance rates that fall in line with that.

If you’re not sure about your driving, one thing to keep in mind is Progressive Snapshot is among the programs that raises the rates of high risk drivers based on telematics reports. So you may not want to track your teen’s driving that way. Some other programs offer alternatives that guarantee your rate won’t go up because you used the program.

Whatever the future holds, you can enjoy discounts on your auto insurance now. With these systems, you don’t have to worry about starting a clock or hitting any buttons. The program follows you through a plug-in device, mobile app on your phone, or other automated methods.

Just enter your zip code to get auto insurance quotes and compare your options. Then see if the company you choose has a program like Progressive Snapshot to lower your insurance premium based on your actual driving. You can compare your insurance rate with or without telematics and even with a different driving score. Then you can make the decisions that will get you a lower rate while being a safer driver.