Car Insurance Trackers: What Data is Tracked?

 

Many vehicle insurance companies are now offering policy price discounts for clients who volunteer to equip their car or truck with an insurance tracking system.  Historically, car insurance companies have relied on various demographic information in order to determine the likelihood of a policy applicant making future claims.  This began with the creation of tables, known as actuarial tables, notating the number of vehicle accidents by location, by driver's gender, age, type of vehicle and more.

Then, when you were applying for insurance coverage, your personal driving history, including driving infractions and any past claims, were added to those statistics.  Driving history proved to be a good indicator of future potential claims.

While these actuarial tables remain an important part of your car insurance underwriting, determining whether or not to sell you a policy and at what premium rate, car insurance trackers add another level of accuracy to this process.

What is a Car Insurance Tracker?

Car insurance trackers were first introduced in the U.S. by Progressive Insurance Company in 1998.  Progressive's program, called Snapshot, is what's known as usage-based insurance.  It personalizes your car insurance premium rate based on the way you actually use your vehicle.  You pay according to the data collected by your tracker, which is sent to your insurer and analyzed to determine your driving habits.

Many auto insurance companies offer usage-based programs.  Most provide an immediate discount to your policy cost simply for signing up to participate in the program.  You then get a personalized premium rate at renewal time, depending on the results of the analysis of your driving habits.  While there's the potential that your premium rate may increase if it's found that your driving behavior shows increased risk, most drivers experience lower policy costs at renewal time.

What Data is Tracked?

There are two ways for data to be tracked: one is with a dongle that plugs into your car's computer via the OBD-II port and the other is through an app loaded onto your smartphone.  Once collected, the data is sent wirelessly to your insurance company for analysis.

Insurers are interested in information that indicates your typical driving habits, particularly those that show risk of potential claims.  Data collected by the tracker system may include:

• Hard acceleration
• Hard braking
• Speeds driven
• Fast cornering
• Use of handheld device while driving
• How often you drive, for how long and what time of day