Driver monitoring: Helpful to manage risk or simply spying? Behaviors matter!

vehicle telematics

As retail insurance agents and risk managers, we experience the full gambit of public opinion regarding the public’s perception of vehicle telematics. As expected, our firm is made up of team members who conduct sales and service for families and commercial companies, so each and every one of us have our personal opinions! However, separate from our personal opinions, the risks and benefits of driving behavior monitoring are to be reckoned with, when it comes to insurance company strategy.

Regardless of our personal opinions, insurers are investing heavily into vehicle telematics, which is comprised of electronic hardware, smart phone applications, cellular service links, proprietary service analysis of movement factors, insurance company “black box” analysis, actuarial factors that calculate risk and therefore premium discounts and surcharges, and the communications chain from the insurance companies back to retail agents and ultimately the policyholders. That’s a lot of links in a chain, whose steps and routes to and from vary widely!

The bottom line? Insurers are attracted to families and businesses that are willing to allow for driver behavior analysis. By virtue of the fact that some decision makers will allow the insurance company to monitor certain clearly outlined behaviors identifies those families and businesses as “better risks”. If you think about the causes and conditions under which some of these choices can affect the rates of accidents it is likely that they will become clear to you.

What do they measure? For the most part, four basic forces of inertia are measured:

  • Pace of take off from a stopped position. (drag racer?)
  • Abruptness of slowing and stopping. (tailgating?)
  • “Yaw” of vehicle while underway. (leaning of vehicles while turning and negotiating curves.)
  • Time of activity. (Do covered vehicles drive from point to point at 2am nightly? Or are drivers of the vehicles clearly in bed by 8pm?)

Most consumers can brainstorm with some subjectivity as to how and why these factors can spike risk for insurance companies, right?

If one thinks about these four criteria, most of us could generate circumstances where these items could be clearly linked to risks, and therefore financial outcomes over time. Furthermore, all of the criteria are fluid, meaning that everyone has to slam on the brakes sooner or later due to debris in the roadway, or has found themselves in the incorrect lane to make am important turn, so has to gun the gas pedal to switch lanes and navigate as deemed appropriate. Patterns however are what drive claims. Someone who follows too closely for 20 miles every morning between 8:30am and 8:50am during their commute is bound to rear-end the car(s) in front of them, and perhaps multiple times.

Many of us drive smart cars that record a significant volume of statistics, decisions, and situations, as what car manufacturers see as their empirical data if and when they need to defend their product from an attack of their vehicles due to some sort of manufacturing defect. If we could save premium dollars by allowing our company to analyze how we drive, why shouldn’t we? (Heaven knows our Androids and iPhones already know where we are, who we are with, where we shop, what we look at online, etc.)

Make sense? Have opinions? Do you want to have a discussion with one of our agents about pursuing additional car insurance discounts by submitting to analysis? Sometimes any reasonable discount is worthy of substantial consideration. Claims are not decreasing, nor are the repair costs.

Telematics devices, as they are called can be plug in items for your vehicle diagnostic port or simply an app downloaded to an Apple or Google device.

Every insurance company that utilizes this as a cost savings tool provides educational material, whether as part of the app, via Youtube, printed materials, etc. But they want drivers to know how they are being measured so that they may take advantage of opportunities to focus on safe driving to attempt to be safer while lowering insurance costs.

Contact us by phone, e-mail, or SMS text to talk about your policies.