How Do Car Insurance Tracking Devices Work?

 

Car insurance tracking devices are a great piece of technology, not only for drivers who use them but for companies that insure those drivers.  Also known as "telematics," vehicle tracking devices have been popular with many insurance companies since the late 1990's, with Progressive Insurance Company pioneering efforts in the U.S. to get these devices used in cars driven by their auto insurance policyholders.

What are the Benefits?

For insurers, the benefits of having tracking devices operating in their policyholders' vehicles include:

• Letting the insurance company know how safe of a driver you are by collecting data on such things as harding braking, fast acceleration, aggressive cornering and speeds driven.
• Letting the insurer know how much you drive, what times of day your car is being used, where it's being parked overnight and whether you're using your cell phone while driving.

All of the above-listed data give a picture of your driving habits and your likelihood of engaging in behavior that may cause you to be prone to be involved in an accident.

Benefits to you as a driver with telematics operating in a vehicle include the collection of data that can potentially help you to become a safer driver.  Learning how to overcome your tendency for fast acceleration and other forms of aggressive driving can help save you money not only on your insurance policy premium costs but also your fuel usage.

How it Works

There are two types of auto insurance trackers.  One is a dongle that plugs into your vehicle's On-Board Diagnostics II (OBD-II) Port, which is where your mechanic accesses data from your vehicle's on-board computer.  The other method for activating an on-board tracker is to load a special app onto your smartphone, which you must then carry in your car when driving.  The data collected by these two tracking methods is then sent to your insurance company where it can be analyzed.  Many insurance companies will give you an immediate discount on your policy premium cost when you sign up for their auto-tracking program.  Others will wait a predetermined amount of time to analyze your driving habits before deciding whether to offer you a discount and for how much.

Some Additional Benefits

Additional features some trackers provide include contacting emergency services in the event of a collision even if, as the driver, you're unresponsive.  They can also send roadside assistance if your car breaks down.