How Telematics and Usage-based Insurance Are Changing the Game

The auto insurance market is dynamic and ever-evolving. While you likely understand the importance of coverage and may be familiar with the basics of how your rates are calculated, you must also remain aware of new trends and patterns. When it comes to auto insurance, you may want to familiarize yourself with two particularly prevalent recent developments: telematics and usage-based insurance.

What Are Telematics?

Telematics are technological advancements that have become more commonly used in auto insurance in recent years. Through smart technology in your vehicle, insurers can track information and analyze data about your driving habits. This may include analytics regarding your mileage, speed, the times of day when you drive, and acceleration and braking habits. For example, if you speed, your telematics may report this to your insurance carrier, which could adversely impact your rates.

What Is Usage-based Insurance?

Usage-based insurance (UBI) policies are an increasingly popular type of coverage that uses telematics data to help determine premiums. Traditionally, insurers may have relied primarily on personal details, such as your location, driving record and age, to assess risk levels. However, telematics can now offer real-time data regarding your behavior and habits behind the wheel, potentially providing carriers with valuable new insights regarding how safe or risky you may be to insure.

What Are the Benefits of UBI?

If you choose to purchase a UBI auto policy, you may enjoy various benefits, such as the following:

• Lower premiums—If telematics show you to be a safe driver, you could save on future premiums.
• Better driving habits—Telematics may help you identify flaws in your driving, such as braking too suddenly. Additionally, knowing you’re being monitored may inherently help you remain diligent behind the wheel.
• Easier investigations—After an accident, data gathered through telematics may help investigators understand who may have been at fault and streamline the claims process.

We’re Here to Help

Contact Viva Insurance Services in Schaumburg, IL, today to learn more about telematics and UBI coverage options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.