During the last couple of years, technology has been changing the insurance industry in many ways. From fitness tracking devices to cyber insurance policies, these changes keep reshaping the way the industry works. More recently, data has been playing an important role, especially when we talk about telematics and car insurance policies. Even when it sounds complicated, telematics comes with many benefits.
This new relationship between telematics and car insurance is allowing companies to rewrite the rules. To begin with, it allows insurers to fully take advantage of their customers’ data and use it in their favor. Such data also promotes safe driving behaviors that result in safer roads for everybody. Besides, telematics and car insurance allow for lower and more accessible coverage premiums.
Taking Advantage of Data
One of the many benefits of telematics and car insurance is the great amount of data that results from this. This data provides both insurance companies and their customers with really useful and relevant information. By using safe driving apps or online tracking devices, we can have access to information regarding our driving habits. Understanding how much we drive, how fast, how many miles, top speeds, etcetera, can help us become better drivers.
Promoting Safe Driving
Thanks to all the data that becomes available through telematics, we get the chance to promote a culture of safe driving. When we look at our driving behaviors, we can be aware of possible risks we could avoid. Besides, many insurance companies are offering rewards and discounts for being safe drivers. Avoiding risks like hard stops, late-night driving, and speeding could end up saving us a fair amount.
Insurance Based on Usage
Telematics is bringing many changes for the insurance industry that simply were not possible a couple of years ago. Many companies are starting to implement usage-based car insurance policies that hadn’t been applied yet. Paying a rate per mile might sound like a more affordable and accessible insurance policy for many. Other companies are also offering daily rates instead of per-mile rates, which might also work for others. This type of plan only needs our insurer to set up a device in our car in order to obtain and share our driving data.