Is good to know much about something before going into it, Maybe you are new to Telematics and want to know about it or you already know about it but just want to know the Advantages And Disadvantages of Telematics. Whatever you want t know about Telematics just read this post.
Telematics insurance as a way to lower prices is growing in popularity. Fleets with smaller vehicles usually pay about $1,000 per year for each vehicle, while fleets with large trucks can pay $1,500 or more. Telematics insurance can save an average of 10% to 15% off of those costs. How does telematics insurance work, and What Are The Advantages And Disadvantages of Telematics? Lets See!
What Is Telematics?
Telematics (or a telematics system) is a method used to collect information about your mileage and driving habits. Insurers generally use telematics data to offer personalized driving feedback, safe-driving rewards or potential cost savings on your car insurance policy for safe driving.
Telematics may also come into play if your insurer offers mileage-based insurance policies (sometimes called “pay-per-mile insurance”).
Telematics data is typically captured by a mobile app or a small telematics device provided by your insurance company. If your insurer provides an auto tracking device, you can plug it into your vehicle’s onboard diagnostic port (OBD-II port), which is usually located under your dashboard. Vehicles produced after 1996 typically have this port. In some instances, telematics data can also be captured directly through your car manufacturer, according to the Insurance Information Institute (III).
If you enroll in a telematics program with your insurer, you agree to allow the car, device or app to send this information to your insurance company.
What Are The Advantages And Disadvantages of Telematics?
Telematics system has safety features because of reducing the number of accidents in vehicles. For example installing a telematics system is a reason to slow down the speed by drivers. However, Telematics system has disadvantages too. Lets look into the Advantages And Disadvantages of Telematics.
What Are The Advantages of Telematics?
If you’re exploring your insurer’s vehicle telematics program, these are three potential benefits:
1. Personalized Driving Feedback: Telematics data generally provides real-time information about your mileage and driving habits. For instance, a telematics device or app records the number of miles you drive, your speed, and how quickly you brake. This technology can also analyze the time of day when you drive. This data can help you become more aware of your driving habits so you can be a safer driver.
Opting into a program may also provide you with an opportunity for cost savings. Some telematics data will likely incorporate your personalized driving behaviors into your insurance rating, which means if you avoid risky driving behaviors, you may save more on your auto premium compared to someone who is a riskier driver, according to the III. This can give you greater control over your auto insurance costs.
2. Safe-Driving Rewards Or Car Insurance Savings: You may be able to get discounts and rewards just for signing up for a telematics program, as well as earn additional rewards later for being a safe driver, says the III. For instance, drivers may be rewarded for avoiding risks such as hard stops, traveling late at night or speeding.
3. Pay-Per-Mile Car Insurance: A telematics system is also a key part of pay-per-mile car insurance (also known as usage-based insurance). If you opt into this kind of program, your insurer may track the miles you drive via a mobile app or device you plug into your car. You may be charged a daily base rate and a per-mile rate for each mile you drive. Your insurer may allow you to review your trips and daily costs via an app or website.
With pay-per-mile insurance, you generally pay for the miles you drive and not for the miles you don’t. For low-mileage drivers, this often provides you with additional cost savings. In other words, if you drive less, you could pay less.
If you practice safe-driving habits, a telematics program may be one way to help you save money — and become a better driver.
4: Theft Recovery: Real-time tracking allows a stolen car to be located within minutes from a smartphone or laptop, so should the worst happen you can contact the police and recover your vehicle quickly and efficiently.
What Are The Disadvantages of Telematics?
Telematics system has disadvantages. For example, GPS wireless passive tracking cannot send information about vehicle until the vehicle returns back to its company. The company does not have information about the vehicle when it is its own way.
1: Cost: installing a telematics system is expensive even, if user has ability to install the telematics system because it needs to purchase hardware and software. GPS types have different prices. Cellular based tracking has lowest price which is about $700. However, the user has to pay about $35 monthly for information which is displayed over the internet.
Hardware price needs $700, and $800 for the database and network in wireless passive tracking. Furthermore, average cost for the Satellite based real-time tracking is between five and hundred dollar.
2: Tracking: user of the system gives a lot of privacy information to the system. It is easy to track the user because of sending his privacy information into the system. Sometimes users do not want to control by systems because the system can find the user easily
3: Distraction: automotive telematics have a disadvantage which is distracting the driver by looking at the navigation. Drivers may have an accident because of looking at the road and navigation at the same time.
4: Power Sourcing: Both battery-powered and hardwired tracking devices come with their disadvantages. Battery-powered trackers need to be kept charged at all times in order for them to work, which could become tedious.
The charging time of a device varies significantly between models and they are considered easy to install. Hardwired trackers on the other hand use power from your car’s battery, so there’s no need to re-charge. However, if they’re not installed properly this can lead to its depletion, and they are more difficult to install.
Insurance Companies and Their Telematics
Most national insurance companies offer tracking-based insurance.
- Allstate: Drivewise
- American Family: KnowYourDrive
- Farmers: Signal
- Geico: DriveEasy
- Nationwide: SmartRide
- Progressive: Snapshot
- State Farm: Drive Safe and Save
- Travelers: IntelliDrive
- USAA: SafePilot
Final Words On The Advantages And Disadvantages of Telematics
Technology is developing every year and is used by developers of the system in many aspects in life. Telematics system is developing in different aspects. It seems that it provides a lot of services in human lives. It makes life faster and reducing accidents in vehicle car, monitoring patients at home.
However, when the system does not have strong architecture and does not have insufficient methods for encrypting customer‟s information, it makes problems. In this case, customers lose their private information and sometimes they
Likewise, telematics organizations lose customers because of losing the reliability of their system. Organizations should aware about the security requirements, while they start to produce the system so the system may not have big issues in security. People need to understand the telematics system and encourage them to use it because each system provides several services to them. For example, tracking vehicle is important since the vehicle is under monitoring.
Nevertheless, some drivers do not like this service because it is easy to find vehicles. All in all, telematics organizations need to explain their system and increasing the security features of the system.