Many insurance companies like Progressive, Travelers, and Safeco will offer you discounts and credits for installing a tracking device in your car. So what does a driver tracking device measure and how will it affect my auto insurance?
Auto insurance companies use the information transmitted to them on these devices to determine whether or not your driving habits warrant a discount and by how much. Drivers with good driving habits can achieve discounts on their auto insurance by as much as 30% or more in some cases. Drivers with not so good driving habits can expect lower discounts or none at all.
Progressive auto insurance company was the first carrier in the United States to launch a Telematic device in 1998, called the “Snapshot”. Many other insurance carriers such as Travelers, Liberty Mutual, and Safeco have since introduced their own version of these Telematics devices since that time, allowing millions of drivers in the U.S. to achieve discounts off their auto insurance premiums.
How it works
When you sign up for the program the insurance company will mail you the Telematic device and you will then plug this device into your on-Board diagnostics port(OBD II port). This is the same port located below the steering column that technicians and mechanics use to plug in their portable scanning devices to diagnose errors and technical problems with your car.
The insurance company will typically want you to keep the device continuously plugged in for a period of 90 days in order to monitor your driving habits. Most modern cars manufactured within the last 25 years or so come equipped with this OBD II port. The car’s computer will then transmit data the insurance company wants to collect to this device and then send this encrypted data to the insurance company using a wireless signal.
What does it measure?
The insurance company can collect a number of data points, but most often, will use the following data as a baseline: Driving time, speed, braking, and the mileage traveled. All these indicators paint a picture for the insurance company of what type of driver you are and by what discount, if any, you may qualify for. For the most part, drivers that stay off the road after 10 O’clock at night and drive fewer miles per day with soft braking habits are deemed less risky than drivers with opposite habits.
Once the device has been installed for the 90th consecutive days the insurance carrier will then report to you your discount and send an envelope for you to mail the device back to them. Be sure to send the device back promptly as failure to do so could cost you some money on your next premium and negate any type of discount you may be entitled to. Usually, you will only need to keep the device plugged in for the initial 90 day period and will not need to plug in again for the life of the policy.
This program is only optional and not required by most insurance carriers we work with. So, it really is up to you to decide if the potential discount is worth having the insurance company track your driving habits for a limited amount of time.
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