If you’ve ever applied for a new auto insurance policy, you’ve probably been given the option to install a device in your car that tracks your driving habits. These devices are known as “telematics” and almost all major insurance companies now offer them to their customers in exchange for potentially reduced premium rates. The devices attach to the vehicle’s OBD-II port and collect data from your car’s computer. Insurance companies can program them to monitor different metrics, but some of the most common are:
- Time the car was used
- Distance driven
- Braking patterns
So is it worth installing one of these to receive a premium discount? Like all answers in the legal world, it depends. Let’s take a look at some of the pros and cons of telematics devices before we arrive at our answer.
- Lower premiums: This is the primary benefit to the consumer and the most common reason why people choose to install them. By linking insurance premiums to your actual driving habits, an insurance company can be more precise with the premium it charges you. Thus, if you are a good driver, you’ll likely pay a lower premium than what you would without it.
- Estimation of damages: Data collection from your vehicle allows insurance companies to more accurately recreate accidents and estimate the compensation you are owed in the event that your vehicle is damaged in an accident.
- Security: If your telematics device tracks your vehicle’s location, it will be much easier for the police to find and can thereby lower accident and theft related insurance costs.
- Privacy: The most frequently cited drawback of telematics devices is that you give up a little bit of your privacy when you use them. Each insurance company can program a device to track different things, but the most invasive metrics insurance companies track is your location. Many are simply not comfortable with their insurance company having this information.
- Raw data is not a good indicator of driver safety: You may think you are a safe driver, but insurance companies have their own definition of what they consider to be “safe.” For example, most insurance companies consider extreme braking events to be examples of dangerous driving. But let’s say you live in a crowded urban environment and you frequently slam your brakes to avoid pedestrians darting into streets or cars in front of you suddenly stopping. A telematics device is incapable of distinguishing between good extreme braking and bad extreme braking, and your insurance company could raise your rates on the basis of this information.
- The discount might not be that great: A 2016 Pew survey found that many drivers who use telematics devices actually never receive their promised discounts at all or receive a much smaller discount than they were promised.
So, Should You Do It?
If you are generally a safe driver and are comfortable giving up a bit of your privacy in exchange for a slightly lower premium, go for it. Just make sure that your insurance company does not charge a penalty or raise your rates for leaving the program. If you’re not such a great driver, it’s probably better to pass on this particular program.
Contact an Atlanta Auto Insurance Attorney
The lawyers at Slappey & Sadd are experienced car accident attorneys who protect the interests of individuals and families in the event of serious personal injury or wrongful death. Contact us for a free consultation to discuss your case by calling 404.255.6677. We serve Atlanta and the entire state of Georgia, including Sandy Springs, Decatur, and Lithonia.