According to Beinsure Media, Telematics Insurance technology has the potential to overhaul the fleet industry and is becoming a mainstream option for customers. Higher interest in fleet telematics, a desire to reduce losses and more sophisticated, affordable technology solutions entering the market are just three key drivers. The enabling technologies stem from telecommunication advances that have reduced the cost of connecting associated but remote endpoints: everything from smartphones to temperature sensors. A focus area within this digitalization movement is telematics-powered Usage-Based Auto Insurance Programs. But the adoption has been slower than expected for several reasons. Ptolemus expects growth in the UBI space, projecting that there will be over 20 million fleet UBI vehicles by 2030. Commercial insurance telematics premiums are expected to reach €20bn by the same year.
Telematics is a technical tool with wide functionality designed to help the driver at a distance. It is especially relevant for those car owners who value their own safety and take care of their vehicle.
Did you know? The first telematics devices appeared in the United States in the 60s of the twentieth century. They have found application in military equipment.
In carsharing cars, a mobile module is installed, consisting of a satellite signal receiver and a data storage and transmission unit. This is a hardware unit with software that collects information about the car in real time. The module connects to mobile networks using a SIM card, and control access is provided through external devices, such as a smartphone. Through the mobile application, you can find out where the car is, where it is moving and at what speed. Through applications, users can rent carsharing cars, and operators can monitor their movement.
Telematics is not just a technical device. Its installation on a vehicle can significantly reduce the cost of car insurance. The introduction and spread of telematics brings significant benefits to insurance companies. But, if you look in detail, this type of service has its positive and negative sides.
If the driver expresses a desire, then a small device is connected to the diagnostic port of the car. As the vehicle moves, it collects data that determines the driving behavior of the customer. Evaluation is made on a 10-point scale. Not only the insurance company, but also the driver has access to the collected information. To view his results, he needs to install a special application on his smartphone. The owner of the car, taking care of confidentiality, with the help of settings can determine the circle of access to the collected data.
Important! The telematic device itself, connected to the car, records the speedometer and odometer readings, reads the engine operation parameters, and also receives data from other blocks of the car. All unsafe driving maneuvers will be noticed, and these are sharp braking, turning and accelerating. Also subject to additional analysis indicators of speeding.
The conclusion suggests itself that with such a “controller” as a telematic device, you just need to be very careful on the way and drive slowly, measuredly, without making sudden maneuvers. You should also be aware that even the most minimal speeding will be recorded, which is why even a responsible driver can reduce the driving rating, losing the cherished points. But it is worth noting: if the car moves along the road slower than the speed of the general flow of cars, then its driver necessarily causes not only general dissatisfaction, but also can create an unpleasant emergency. And here a certain paradox arises, since the most important task of telematics is precisely to reduce the accident rate.
The presence of telematics devices in cars is very beneficial for insurance companies. It is known that there are many factors that are taken into account when calculating the cost of an insurance policy: this is the model of the vehicle, the year of its manufacture, the driving experience of its owner, the total mileage, the presence of an accident, etc. Information about how carefully a particular client drives is important for insurers car, whether he is inclined to exceed the speed, to make sharp accelerations and overtaking, how much he travels, whether he often violates traffic rules, whether he takes care of the car.
If the owner of the car has positive characteristics, then this reduces the risks for the insurance company, and she, going forward, can make a discount when the driver purchases an insurance policy. If a telematic monitoring device is installed on the car, this stimulates the car owner to drive more calmly and measuredly. With such driving, his chances of getting into an accident are reduced, which means that the insurance company is unlikely to have to compensate for the damage.
Methods for assessing the operation of the vehicle and tariff setting in each company vary significantly. The most commonly used methods for calculating the tariff include:
an analysis of the driver’s individual driving style is made, after which he is offered an insurance rate (taking into account which roads the car drives on, when and how much it is used, etc.); who uses the vehicle on certain days or seasons); PPR ("Pay for Risk") - takes into account the riskiness of the driver's trips.
Important! The proposals of the insurance company with which the contract is signed must be studied in detail. You should be extremely careful, delve into all the details of the contract and choose what type of insurance will be beneficial for you.
Some insurance companies will use a telematics device to test the driver for a month, while others for a whole year. It is generally not recommended to purchase insurance with telematics and restrictions for cars of certain models, since the installed automatic accelerator will ensure the loss of the discount and the device itself.