Telematics is a tech field that combines telecommunication devices to import or export information. There are numerous applications, but one in particular you may find very interesting. It involves insurance telematics on vehicles. Here is how some insurance companies are using this technology to provide consumers and drivers with more accurate insurance quotes.
A small plug-in device is sent to consumers who agree to allow insurance companies to collect data from the device for three months. The device plugs into a port under the dash, which exists in every car that has an on-board computer. When the device is plugged in, it collects the needed data from your car's computer. Some devices will just store the data and await for shipment back to the insurance company. Other devices are able to use cellular and WiFi technology to immediately send data of importance back to the insurance company, who will then adjust your insurance rates according to the data received.
The Data Collected
The data that these devices collect is very specific. Diagnostics on your car and whether or not any parts are failing or about to fail tells the insurance company about any potential accident risks from the components that need to be repaired. The number of times you slam on the brakes or step hard on the breaks to stop also gives the insurance company a snapshot of your driving habits. The speeds you travel versus the speed limits in your travel zone, and how often you and your passengers buckle up says a lot too.
What the Data Says about Your Vehicle and You
Telematics devices reveal if you are heavy-footed on the gas, frequently jam on the breaks in traffic, are careful about personal safety and seat belt laws, and whether or not you take good care of your car. When the insurance company has a series of data 'snapshots" of your car and you, it can see what the potential risks are to insure you and your vehicle. If there is a lot of speeding, jamming on the breaks, no seat belt wearing, etc., your insurance rates go up. If you are super careful when you drive, or just careful during the data collection period, your rates may go down or stay the same.
For some consumers, the risk that their rates may go up is worth a crack at reduced rates. Hence, they choose to drive with the telematics device in place for the required amount of time. At any rate, you would get to see just how safe a driver you really are.