How Do Those Car Insurance Tracking Devices Work?
All around the world, in every country, a car owner must have good vehicle insurance. It may be for your vehicle or your fleet- but you must have one. Of course, some people think it is a waste of money because they are safe drivers and do not need it.
While you may be an excellent driver and have all the necessary precautions in place, you never know what is going to happen in the future. Then there is the matter of your fellow drivers on the road- rash driving is very common and poses a danger to everyone, including you. Car insurance is a necessary shield for drivers.
Procuring insurance is not easy though. You are considered eligible for it based on many factors, one of them being your driving performance. Insurers initially referred to your driving record to get an idea of your driving habits.
However, this was before the introduction of car gps trackers. These devices have changed the way car insurance works. They are attached to your car. Insurers access the data recorded by it via an app.
Based on the information it records, they decide whether to give you car insurance or not. These devices are instrumental in deciding the prices you pay for your car insurance. They are an important determinant of car insurance rates.
There are many car insurance tracking programs utilizing this system to provide insurance to safe drivers. Car insurance programs are becoming very popular by the day, as they lead to cheaper insurance rates for many.
So how does an insurance tracker work? In this article, we have compiled all that you need to know. Based on this information you can decide whether such a program is suitable for you, and how it affects your insurance rates.
What Is An Insurance Tracker?
It is a telematics program that keeps an eye on your driving habits. All the information regarding the same is recorded. There are two types of car insurance trackers available in the market. One of them is called a dongle- it is a physical telematics solution that you must plug into your vehicle.
This device is usually provided by the insurer as a part of the Usage-Based Insurance (UBI) program. The other option is an online app, that you must install on your phone. Your insurer and the program you choose often determine the kind of app you install for this.
The insurance company will use this device to derive information about your behavior behind the wheel. They record information like speed, braking, mileage, maintenance, and other key metrics. These details help determine a personalized insurance premium. Therefore, your performance on the road determines how much you pay for your insurance.
Every insurer has a different policy and set of rules regarding car insurance. If at any time you stop using the app or unplug the device, it will negatively impact your insurance premium. However, you don’t need to join such a program. If you think you will save more money without a program, you can drop the program whenever you want. You have to contact your insurer and let them know.
How Does An Insurance Tracker Work?
The physical telematics device and the online application work in different ways.
The physical, standalone device is attached to the car through the OBD (onboard diagnostic) port. You will find this port under the steering wheel. This device uses the OBD system, along with a connection of sensors to track performance. Through important indicators, this device collects information on how you drive, your speed, acceleration and braking, and so on.
The mobile app is simpler to understand. All you have to do is install it on your phone and follow the instructions. The app uses in-built technology to gather information on your phone. It detects behaviors like harsh braking and acceleration. However, the information is not as reliable as the physical device, as the latter derives information directly from the OBD port.
The collected data is encrypted and then sent to the insurer. This data is analyzed and evaluated to determine your insurance premium and whether you are eligible for any discounts.
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Types Of Coverage
There are two main types of coverage.
Usage-Based Insurance Programs (Ubi)
UBI programs determine your insurance rates based on your driving activity. These depend on how you drive and what safety measures you demonstrate. So, if you don’t show any signs of harsh braking, acceleration, or distracted driving (using your phone as you drive), you are deemed a safe driver.
Pay-Per-Mile Insurance
In Pay-Per-Mile Insurance, the insurer uses a tracking device to track how many miles you drive in a certain period. This period is usually four weeks. In this process, you pay a base rate for your insurance premium and an additional per-mile rate.
This system results in a lower monthly premium as compared to other types of coverage. So, if you do not take your car out that often or have a short commute, this type of coverage is the right one.
What Information Is Collected?
- Harsh acceleration
- Harsh braking
- Mileage
- Speed
- Driving hours
- How often do you drive
- Fast cornering
- Phone usage while driving
- Accidents, if any
- Nighttime driving
With this data, they will use other telematics solutions to see where you were driving, along with the traffic controls in the region. With all this information they can determine whether you are a safe driver or a harsh, careless one.
With the phone app method, they can also know whether you were using your phone while driving. These apps also include a dashboard for you- you can see your driving habits and figure out where to make improvements. It brings about awareness of your driving behavior.
You will know what mistakes you have made and where to improve. Of course, this app will record your improvement as well. This development will lead to better insurance rates for you. Hence, insurance trackers not only assist insurers in understanding your driving activity but also help you improve it.
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