Insurance
Steps On How Do Those Car Insurance Tracking Devices Work
Car insurance monitoring devices function by allowing insurers to monitor your driving habits and calculate premiums that appropriately represent your risk. A car insurance tracking device can be installed inside your vehicle or accessible through a smartphone app.
Usage-based vehicle insurance (UBI) schemes that use tracking devices are becoming more popular since they may result in lower car insurance premiums for cautious drivers or those who don’t drive much.
Before you determine if this program is good for you, you need understand how these devices function, what data they collect, and how they influence your rates.
What Is an Insurance Tracker?
An insurance tracker is a telematics program that collects data about your driving habits. There are two main types of auto insurance trackers available:
- A physical telematics device, also known as a dongle, that is installed or plugged into your vehicle.
- An app that you can download onto a smartphone.
The one you use often depends on your insurer and the program you choose.
Regardless of the type of tracking device involved, your insurer will use it to collect specific information about your driving habits, including speeding, braking, distance driven, time of day behind the wheel and other behaviors. Typically, insurers provide the device as part of a usage-based insurance (UBI) program.
What is Usage Based Car Insurance?
A usage-based insurance (UBI) scheme calculates individualized insurance rates based on telematics data from your driving history. This is also known as “black box car insurance.”
A UBI scheme can benefit a driver who does not travel frequently and prefers a pay-per-mile rate that matches their vehicle usage. It’s also beneficial for responsible drivers who desire a lower premium that matches their driving behavior. Drivers who are deemed dangerous owing to their driving history or inexperience behind the wheel may also join.
Progressive’s Snapshot was the first UBI program in the United States, and other insurers have since followed suit. Today, consumers may select from a variety of tracking services, including Drivewise by Allstate, DriveEasy by Geico, and Drive Safe & Save by State Farm.
These telematics programs are not necessary; nevertheless, you must opt in and utilize the dongle or app to track your driving. If you do not receive a discount through the program, you should be able to quickly opt out.Car insurance monitoring devices function by allowing insurers to monitor your driving habits and calculate premiums that appropriately represent your risk. A car insurance tracking device can be installed inside your vehicle or accessible through a smartphone app.
Usage-based vehicle insurance (UBI) schemes that use tracking devices are becoming more popular since they may result in lower car insurance premiums for cautious drivers or those who don’t drive much.
A usage-based insurance (UBI) scheme calculates individualized insurance rates based on telematics data from your driving history. This is also known as “black box car insurance.”
A UBI scheme can benefit a driver who does not travel frequently and prefers a pay-per-mile rate that matches their vehicle usage. It’s also beneficial for responsible drivers who desire a lower premium that matches their driving behavior. Drivers who are deemed dangerous owing to their driving history or inexperience behind the wheel may also join.
Progressive’s Snapshot was the first UBI program in the United States, and other insurers have since followed suit. Today, consumers may select from a variety of tracking services, including Drivewise by Allstate, DriveEasy by Geico, and Drive Safe & Save by State Farm.
These telematics programs are not necessary; nevertheless, you must opt in and utilize the dongle or app to track your driving. If you do not receive a discount through the program, you should be able to quickly opt out.
Before you determine if this program is good for you, you need understand how these devices function, what data they collect, and how they influence your rates.
How Does It Actually Work?
How an auto tracking device works depends on the equipment your insurance company uses.
Stand-Alone Device
- Installation: The device is typically plugged into your onboard diagnostic (OBD-II) port, which is commonly found beneath the steering wheel.
- Operation: This method relies on your car’s onboard diagnostic system and a network of sensors that tracks key performance indicators like fuel and oil levels, mileage, and tire pressure.
- Data collection: Once installed in the OBD-II port, the device can collect information about where and how far you drive, your speed, and your breaking patterns, among other things.
Mobile Tracking Device
- Installation: All you have to do is download the app on your phone, follow instructions to sync it to your car, and start driving.
- Operation: The app uses sensors to gather data on your driving.
- Data collection: A mobile tracking device doesn’t have direct access to information gathered from your vehicle’s OBD-II port, but it can detect behaviors like sudden acceleration and hard braking.
Regardless of which method your insurer uses, the information collected is typically encrypted and sent to the insurer. The data will be used to evaluate your driving habits and determine your rate and any other discounts or program benefits you are eligible for.
What Data Is Tracked?
Most insurance companies that offer tracking programs disclose what data is collected. You can typically find the information on their website or by contacting an agent. Generally, they’re looking for information that illustrates your usual driving habits, particularly habits that could lead to accidents or help you avoid them.
Typical data collected includes:
● How often you drive and for how long.
● Hard braking
● Hard acceleration
● Speed
● Fast cornering (quick, sharp turns)
● Time of day, especially nighttime driving
● Phone usage while driving
Your insurer will use this data to set your rates, but the information collected can also be useful to you. Smartphone apps often include a dashboard and feedback so you can see how you’re driving. If you see a lot of hard braking and distracted driving, you can adjust your behavior to improve your driving and, potentially, your auto insurance rate.
Should I Let It Monitor Me?
There are benefits as well as drawbacks to letting these telematics systems or trackers monitor you. They’ll make the most sense for you if you want to take advantage of specific programs offered by your insurer, such as usage-based insurance (UBI). UBI programs establish rates based on how you use your car. Letting the device track you could be a net positive if it lowers your premiums—or it could cost you more than other insurance types.
- Save by being safe. If you’re a generally safe driver – you don’t speed, aren’t prone to hard braking, and stay distraction-free – you may find that UBI programs reduce your rates.
- Drive less, pay less. UBI programs may also be useful for drivers who aren’t behind the wheel often. Pay-per-mile insurance coverage uses a tracking device to monitor the number of miles you drive over a period of time, typically four weeks. In return, you pay a base rate for insurance and an additional per-mile rate.
- Improve your skills. Allowing your insurance company to track your driving can let you know if your driving could use some improvement and help you build safer habits.
Several insurers, including Geico, USAA, and State Farm, offer usage-based insurance programs, but fewer offer true pay-per-mile or pay-as-you-go programs that exclusively link your rate to mileage. If you’re looking for a mileage-based insurance program, then you may want to consider Milewise by Allstate. There are also a handful of insurers, including Mile Auto and Metromile, that specialize in pay-per-mile coverage.
Cons
- Long commutes could cost more. It’s important to note that if you have a long commute and let your insurance company track you, those miles could drive up your insurance costs.
- Distracted driving could get expensive. If you continuously engage in risky driving behavior, then you could pay more for telematics insurance than for a traditional policy.
- Goodbye privacy. Allowing an insurance company to track your driving data and whereabouts means giving up your privacy—and you risk the company selling your information to a third party.
Who Offers Insurance Trackers?
Most national insurance companies offer tracking-based insurance, but programs vary. Many of the insurers below offer usage-based insurance (UBI) programs that reward you for safe driving. However, each company may use the data they collect in a different way, so it’s important to ask what information is collected and how it impacts your rate.
● Allstate: Drivewise
● American Family: KnowYourDrive
● Farmers: Signal
● Geico: DriveEasy
● Nationwide: SmartRide
● Progressive: Snapshot
● State Farm: Drive Safe & Save
● Travelers: IntelliDrive
● USAA: SafePilot
Why do insurance companies want to track your driving?
By monitoring your speed, driving frequency and braking habits, your insurance company gathers information about your driving behavior and how much time you spend on the road. They can use this to better price your premiums according to their risk in insuring you.
Do insurance trackers save you money?
Yes, it’s possible for these trackers to save you money on your car insurance premiums. If you’re a safe and responsible driver and you don’t drive often, an insurance tracker can report this back to your insurer, who can then offer a discount on your premium.
Can the insurance company see your location?
If the insurance company can access your GPS data, they may be able to track your location. However, they’re more likely to be concerned with how you drive, rather than where you drive.
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