Can telematics offer cheaper auto insurance rates?
It is likely you have heard about telematics, although you may know it by another name such as usage-based, pay-as-you-go or pay-how-you-drive insurance. In simplest terms, telematics uses an installed device in your vehicle to measure your driving habits. Once these measurements are taken, the device reports your driving back to the insurance company and the company uses the data to set your premium.
The premium could be based on several factors, including how far you drive, where you drive, how fast you drive or how safely you drive. Many people consider usage-based insurance fairer because they believe their premiums will be based on their good driving habits rather than on someone else’s bad habits.
The National Association of Insurance Commissioners (NAIC) estimates that about 70 percent of all auto insurers will provide some form of usage-based insurance as an option to customers by 2020. This is based on a study by the National Association of Insurance Commissioners & The Center for Insurance Policy and Research.
Pay-as-you-drive insurance is increasingly offered as an option, although it’s not available for every policy. Curious about telematics? We’d be happy to discuss this innovation with you! http://www.smithandco.com/Smith_and_Co/Home_2.html