How Telematics May Help You Save Money on Car Insurance

 How Telematics May Help You Save Money on Car Insurance

Telematics (or telecommunications system) is a method used to collect information about your miles and driving habits. Insurance companies generally use telecommunications data to provide personal feedback on driving, safe driving rewards or potential cost savings on your car insurance policy For safe driving.

Telematics may also play a role if your insurance company offers mileage-based insurance policies (sometimes called "pay-per-mile insurance").

Telematics data is usually captured through a mobile app or a small communications device provided by your insurance company. If your insurance company provides an automatic tracking device, you can connect it to the on-board diagnostic port (OBD-II port), which is usually located under your dashboard. Vehicles produced after 1996 usually have this port. In some cases, telecommunications data can also be captured directly through your car manufacturer, according to the Insurance Information Institute (III).

If you are enrolled in a telecommunications program with your insurance company, you agree to allow the car, device or app to send this information to your insurance company.

If you're exploring your insurance company's telephony program, here are three potential benefits:

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Personal driving notes

Telematics data generally provides real-time information about your miles and driving habits. For example, a telecommunications device or app records how many miles you drive, how fast you drive, and how fast the brakes are. This technique can also analyze the time of day when driving. This data can help you become more aware of your driving habits so you can be a safer driver.

Signing up for a program may give you an opportunity to save costs. Some telecommunications data is likely to integrate your personal driving behaviors into your insurance rating, which means that if you avoid dangerous driving behaviors, you may provide More on your car premium compared to someone more dangerous, according to III. This can give you greater control over your car insurance costs.

 Safe driving rewards or car insurance savings

You may be able to get discounts and bonuses just to sign up for a telecommunications program, as well as earn additional rewards later for being a safe driver, says the third. For example, drivers may be rewarded for avoiding risks such as difficult stops, late-night travel or speeding.

Pay per mile car insurance

The telecommunications system is also a major part of pay-per-mile car insurance (also known as usage-based insurance). If you choose this type of software, your insurance company may track the miles you drive through an app or mobile device that connects it to your car. A daily base rate and a rate may be charged per mile per mile you drive. The insurance company may allow you to review your trips and daily costs through an app or website.

With payment insurance per mile, you generally pay for the miles you drive and not for miles you don't pay. For low-mileage drivers, this often saves you additional cost savings. In other words, if you drive less, you could pay less.

If you're practicing safe driving habits, a remote communication program may be one way to help you save money - and become a better driver. Contact a local agent to see if your insurance company offers a telecommunications program.