What Is Telematics Car Insurance And How Does It Work?

Finding the perfect car insurance for you can be a challenge, especially for new and younger drivers who are stereotypically more likely to have an accident. However, you could find a cheaper premium that’s catered personally to you – like Lemonade Car, car insurance that uses telematics to help fairly price your policy, for example. 

Telematics is the name of location-based tech, allowing a more fairly-priced insurance policy that suits you and all your driving needs. 

With this in mind, join us as we discover exactly what telematics insurance entails, how it works, and whether it’s right for you…

Let’s talk telematics

Telematics describes the way in which insurance companies gather data from telecommunications – methods such as phone lines, cables or cellular networks. The data, also known as informatics, is used to track driver behavior and safety using a special chip installed in your car’s windshield. 

Some insurance providers even offer telematics insurance through your phone, with a handy app that utilizes the Global Positioning System (GPS) – so all you have to do is keep your location services on at all times. 

Telematics can then pick up whether you’re stopping at stop signs, abiding by speed limits or breaking suddenly, basing your insurance premium on how you actually drive, rather than how other people like you might drive. 

What can telematics analyze?

Thanks to the gyroscopic mechanisms inside your phone, simple movements can be tracked and analyzed whether your phone is in your pocket, on the seat next to you, in your bag, or in a dashboard holder. Due to this, your phone can sense whether you’ve slammed on the breaks or are driving erratically, for example. 

Telematics will also take into consideration some external factors such as the weather or time of day at which you’re driving, enabling accurate predictions to be made based on a wealth of information. 

With all the data gathered, you’ll be pleased to know that telematics can make accurate predictions as to whether it’s actually you driving or not. If you’re a passenger or on public transportation and your driver isn’t the safest, then you can check on the status of your trip through your app or by contacting your insurance provider. However, you can rest assured that telematics has high accuracy to determine if you were the one behind the wheel. 

The benefits

Whilst having your location services constantly switched on and working in the background could drain your phone battery, there are many benefits of using telematics that outweigh this. 

First things first: the better you drive, the less you pay. It doesn’t matter how long you’ve been driving for, how old you are, or any other demographics that could otherwise affect your premium – telematics ensures you will get the best deal for you. 

In addition, your coverage can be tailored based on your milage, so if you don’t drive much, you won’t have to pay as much. This is because someone driving less miles is less likely to get into a crash than the person driving long distances. 

Also, should the unfortunate event of a breakdown happen, telematics will be able to determine your exact location – knowing exactly where to dispatch roadside assistance to, which could be included in your premium. 

Is telematics right for you?

At the end of the day, telematics relies heavily on technology, so if you’re not overly tech savvy then this type of insurance might not be right for you. However, there are plenty of benefits to be enjoyed if you’re happy to leave your location services on all the time, and not just when you’re driving. 

By doing this, telematics can gather a wealth of data to ensure you get the best premium deal that’s personalized to you.