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Tracking Your Driving with Telematics

By September 16, 2022No Comments

Telematics is a technology that uses devices that plug into your car or phone apps to track data about a vehicle’s usage and sends this information to an insurance company. The insurance company then uses this data to calculate rates, give feedback to the driver, and even offer discounts. Let’s take a closer look at how telematics work for auto insurance.

How Do Telematics Work?

If you opt for telematics, you’ll be agreeing to have your driving monitored via hardware plugged into your car or phone app. The hardware or phone app tracks data such as how far the car is driven, what time of day the car is driven, how fast the car is driven, and other data points. This information is then sent to the insurance company through a cellular or satellite connection.

The insurance company uses this data to calculate rates based on the driving habits of the policyholder. For example, if the policyholder drives safely and during low-risk times of day, they may be eligible for a discount. Poor or bad driving habits can also lead to feedback from the insurance company that can help the policyholder become a safer driver overall.

What Data is Collected? 

The type of data collected varies from insurer to insurer, but generally speaking, most telematics policies will track things like:

  • How often you drive
  • What time of day you drive
  • How far you drive
  • Your acceleration and braking patterns
  • Your average speed
  • Phone usage while driving

Are There Any Drawbacks?

While telematics can benefit insurance companies and policyholders, there are some potential drawbacks to consider.

Telematics uses your phone for discounts on your auto insurance

First, some people may feel like their privacy is being invaded if they are constantly being tracked by a black box. Second, if you’ve got poor driving habits like using your phone while driving or excessive speeding, you may lose any discount you get from using the telematics program.

Whether using telematics is right for you will depend on several factors. But if you’re looking for a way to reduce your premium potentially, it could be worth considering. Just make sure you compare policies from different providers to make sure you’re getting the best deal possible.

We know this stuff can be confusing, so don’t hesitate to schedule a call with our team or import your current policies for a full review using the links below – we’ll help you figure out what works best for your family, even if you’re not a McBride Agency customer (yet).


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