Telematics or "usage based insurance" is a current trend in the insurance industry that measures your driving behavior to determine a personalized premium for your car insurance. It incorporates technology by temporarily installing a device in your car or by downloading an app on your smartphone which tracks certain aspects of your driving for a period of time and uses the collected data to determine a discount on your premium that stays on your policy for the life of your car or the life of your policy depending on the program. Almost every major insurance carrier in the US now has some sort of telematics program available.
We get calls to our agency all of the time from insureds asking us to try and lower their rates. Most customers are aware that auto insurance rates are not set at the agency level, but at the corporate level and then are filed and approved by each state's insurance department. As agents we don't have the ability to just snap our fingers and lower a customers rate just because we would like to. However, with Telematics, agents have the ability to offer our customers the opportunity to earn the rate they truly deserve. In my last blog, I spent a lot of time explaining how we all pay more for our car insurance because of the actions of others and how the driving habits and claims activity of people who live in your area are a large part of what determines your premium. Through technology customers can differentiate themselves from the statistics and get rewarded for their safe driving habits. 
So, with this wonderful new technology, every customer at Morris Insurance Services has signed on to be a part of the latest and greatest way to save on their auto insurance right? Sadly, no. Despite our efforts and attempts to explain how telematics works and how it can benefit our policyholders, we get a great deal of resistance to adopting these plans, in particular from the older segment of the agencies book of business. The reasons given are varied, but frequently we hear that customers are concerned that it will be too complicated, or that it takes a high level of computer knowledge to benefit. This is not true! It's actually quite easy to get going and we are happy to help. We also hear that this sounds too "big brother" and people don't want their insurance company following them around. Some insureds also fear that if they perform poorly that their premiums will go up- not true. One frequent response we get from long term policyholders is that they think they deserve a lower rate just for being a good customer and shouldn't have to deal with the hassle of something like this. I don't disagree with these customers entirely, but I've already explained that I don't have that kind of power, so why not get proactive and sign up for something that I can actually help with. People have to face the fact that these days, if they would like to save, it is going to take some sort of participation on their part and often that means adopting the latest technology available. This can mean using your email to go to paperless billing, having your payments deducted from your bank account automatically, and now telematics.
Here's how it works. Once you give your agent permission to enroll in your carriers program you will get an immediate sign up discount just for participating, usually 5%-10%. Next you will receive a plug-in device in the mail or will get an email from the company with instructions on how to download their smartphone app. Once set up and the tracking begins you will get regular emails telling how you are doing. With the app program, you can usually see your progress in real time. Most companies are tracking the same basic categories. First is overall mileage driven. I think this is most important. In the old days, companies gave "short mileage discounts" based on the word of the customer. Most companies did away with these discounts years ago so Telematics tracking gives customers the ability to prove that they don't drive a vehicle very often and get a rate that reflects that. Next is rapid acceleration and extremely hard braking. While companies know that both of these things are necessary at times for safe driving, doing them more frequently could indicate an issue such as aggressiveness or following too closely. Most companies also track frequent very late night driving. Notice I did mention that they are tracking where you are actually going. After the tracking period, usually 3-6 months, you will be notified that the program is complete and will be asked to either mail the device back or to uninstall the app. At this time you will also be told your final discount percentage that will be applied at policy renewal. The discount will stay on your policy for the life of the car if you used the device or for as long as you drive if you used the app. If you did poorly, you will lose the sign up discount and your rate will go back the where it was before, but you will not get a rate increase.
Since Coronavirus has come about, just about every one of us has had to learn some sort of new technology. Whether its teleworking, Zoom happy hours, or Facetiming the grandkids, we are all embracing technology like never before. None of those things I mentioned will save you one dime on your car insurance so why not try something that will? Plus, with people driving less during the pandemic, there has never been a better time to have your driving monitored.
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