Telematics and Auto Insurance

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Hogan773
Posts: 346
Joined: Thu May 07, 2015 11:14 am

Telematics and Auto Insurance

Post by Hogan773 » Wed Jan 10, 2018 1:40 pm

I don't see recent discussions on this and it has been a growing area

I have up till now resisted, but wondering if others have signed up for these dongles and what their experience has been with discounts.

The new agent I was speaking with said he uses one and it has resulted in 15 or 20% discount on his car insurance which sounds like a lot, and he claims that he is not a "timid" driver.

My wife drives like a granny but I tend to drive fast.

My gut is still that they don't need to be tracking my speed and location etc especially if the savings are minimal, and my bigger concern is they would be building a profile for me BEYOND my Accident-Free record to later raise my rates just because I drive "fast", and that would be something that would be hard to get away from. Like "yes he hasn't had an accident in 20 years but he drives FAST so therefore he is no longer a Prime class risk" or whatever....

I've read that lots of millenials don't seem to mind the telematics especially with the promise of saving money. I guess I'm just interested in others' experiences. I would guess that with my Accident Free and Ticket Free status and my personal demographics married/age etc that I am in the lower risk premiums already, so I question how much better they would really give me with telematics --- like I have more to lose than to gain.

Thoughts?

bloom2708
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Location: Fargo, ND

Re: Telematics and Auto Insurance

Post by bloom2708 » Thu Jan 11, 2018 12:36 pm

I wouldn't have any trouble with one of the units.

I fall on the side of "grandpa/grandma" driver. My wife is more of a leadfoot/hard braker. :wink:

I am going to see if my insurance company offers the device.

Big Brother isn't much of a problem if you are a straight shooter. At least that is my take.
Where to spend your time: | 1. You completely control <--spend your time here! | 2. You partially control <--spend your time here! | 3. You have no control <--spend no time here!

totesmagotes
Posts: 31
Joined: Sat Nov 04, 2017 10:08 am

Re: Telematics and Auto Insurance

Post by totesmagotes » Thu Jan 11, 2018 1:07 pm

I'm presupposing that insurers are offering this because it helps them save money in the long run. But how does the use of telematics save them money? I haven't figured that out yet. AFAIK, they don't raise your rates because of the data they collect, at least not directly. Of course, they could do a wholesale increase in rates for everyone then offer a discount for those who use the device and "drive safely" (however that is quantified). This gets back to the behavioral economics issue of discounting cash payments (say, product A is $100, but buyers can save $2 by paying with cash) vs. surcharging credit card payments (say, Product A is $98, but credit card users are charged a $2 fee).

Getting back to the topic... The only real thing that I can see that benefits the insurers is that people are aware of the presence of the devices and, thus, adapt their driving habits such that they drive more safely. In turn, this would be expected to reduce at-fault crashes and thus reduce insurance payouts. However, if an insurer doesn't require the use of the device full time, then I'd think the effect would be muted (unless safe driving habits are "sticky", in that people will drive more safely after removing the device).

open_circuit
Posts: 212
Joined: Thu Mar 30, 2017 9:20 am

Re: Telematics and Auto Insurance

Post by open_circuit » Thu Jan 11, 2018 1:14 pm

Hogan773 wrote:
Wed Jan 10, 2018 1:40 pm
I have up till now resisted, but wondering if others have signed up for these dongles and what their experience has been with discounts.
I refuse to voluntarily use these products. It feels invasive.

Hogan773
Posts: 346
Joined: Thu May 07, 2015 11:14 am

Re: Telematics and Auto Insurance

Post by Hogan773 » Thu Jan 11, 2018 1:57 pm

totesmagotes wrote:
Thu Jan 11, 2018 1:07 pm
I'm presupposing that insurers are offering this because it helps them save money in the long run. But how does the use of telematics save them money? I haven't figured that out yet. AFAIK, they don't raise your rates because of the data they collect, at least not directly. Of course, they could do a wholesale increase in rates for everyone then offer a discount for those who use the device and "drive safely" (however that is quantified). This gets back to the behavioral economics issue of discounting cash payments (say, product A is $100, but buyers can save $2 by paying with cash) vs. surcharging credit card payments (say, Product A is $98, but credit card users are charged a $2 fee).

Getting back to the topic... The only real thing that I can see that benefits the insurers is that people are aware of the presence of the devices and, thus, adapt their driving habits such that they drive more safely. In turn, this would be expected to reduce at-fault crashes and thus reduce insurance payouts. However, if an insurer doesn't require the use of the device full time, then I'd think the effect would be muted (unless safe driving habits are "sticky", in that people will drive more safely after removing the device).
I assume their view is that they can more accurately underwrite risk based on actual driving style - just one more data piece they didn't have before. PERHAPS they are currently pricing in as if everyone is a "risky" driver on this metric and thus they can provide discounts to those who "prove" that they are less risky. Or perhaps they are just offering discounts to entice people to do the boxes, and once they get a profile then they might decide to start pricing with this metric too. Another possibility is that they are currently just collecting the data and comparing it to loss results to determine if it is a meaningful correlation with which to underwrite in the future, and the "cost" of gathering this data is offering a slight discount so people will agree to be test subjects....

I'm sure there are people that know the answers to the above

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flamesabers
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Location: Rochester, MN

Re: Telematics and Auto Insurance

Post by flamesabers » Thu Jan 11, 2018 2:33 pm

Hogan773 wrote:
Wed Jan 10, 2018 1:40 pm
I have up till now resisted, but wondering if others have signed up for these dongles and what their experience has been with discounts.
USAA offers a 5% discount, but I'm not eligible to sign-up for this program as it is only being offered in a handful of states. Despite the privacy concerns, I would be willing to give it a try if I could. The discount is easy savings and it's not like the insurance company has to prove I'm a problematic driver before being able to raise my insurance premiums the next time my policy renews.

hookemhorns
Posts: 69
Joined: Sat Jul 09, 2016 11:16 pm

Re: Telematics and Auto Insurance

Post by hookemhorns » Thu Jan 11, 2018 2:37 pm

We used it on my wife's car and received a 5-10% discount on our semiannual premium after a few months of observation. For some reason my car was ineligible for it even though it's a fairly new model. Would do it again. What will happen eventually is people that refuse to have it will pay a much higher premium.

Hogan773
Posts: 346
Joined: Thu May 07, 2015 11:14 am

Re: Telematics and Auto Insurance

Post by Hogan773 » Thu Jan 11, 2018 2:45 pm

Has anyone seen their rates RISE once they started using these? (more than the normal expected slow creep of rates every renewal)?

ralph124cf
Posts: 2008
Joined: Tue Apr 01, 2014 11:41 am

Re: Telematics and Auto Insurance

Post by ralph124cf » Sat Jan 13, 2018 12:56 am

My real concern is that once a sizeable percentage of people start using these, then the insurance companies will start charging those not using them extra, perhaps on the premise that those not willing to use them have something to hide, whether it be unsafe driving habits or illegal actions or even a mistress.

Ralph

denovo
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Joined: Sun Oct 13, 2013 1:04 pm

Re: Telematics and Auto Insurance

Post by denovo » Sat Jan 13, 2018 6:41 am

No, thanks. I value my privacy too much.
"Don't trust everything you read on the Internet"- Abraham Lincoln

Daryl
Posts: 443
Joined: Thu May 22, 2008 9:34 am
Location: Malvern, PA (I like to sleep near my money!)

Re: Telematics and Auto Insurance

Post by Daryl » Sat Jan 13, 2018 7:29 am

I have one and save less than 10% on my premiums. Based on my last "report card", I don't know how to make a left turn safely!

Longdog
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Joined: Sun Feb 09, 2014 6:56 pm
Location: Philadelphia

Re: Telematics and Auto Insurance

Post by Longdog » Sat Jan 13, 2018 8:32 am

I had one and amassed a 21% discount. After two years, the insurer upped their rates more than I expected, which motivated me to shop around and I found that the best rate for me was with an insurer that doesn't use those devices. My conclusion is that some insurers will choose to use them to fine tune their rates, others will not, and just because an insurer offers it doesn't imply that insurer will have the best rates!
Steve

m1collector
Posts: 7
Joined: Mon Dec 25, 2017 8:24 pm

Re: Telematics and Auto Insurance

Post by m1collector » Sat Jan 13, 2018 8:55 pm

Root insurance has an app you install on your phone and after 2-3 weeks, they will send you a quote. I tried it but never got a quote, but know other people who did. The app tracks your driving behavior. Another form of telematics.

stan_the_man
Posts: 111
Joined: Wed Feb 22, 2012 6:23 pm

Re: Telematics and Auto Insurance

Post by stan_the_man » Sat Jan 13, 2018 9:08 pm

These devices are primarily concerned with total miles driven, time of day and deceleration ("hard braking"). Last time I checked, all of the insurers claimed that they don't use GPS location data -- though that may have changed.

I think most people seeing max discounts are people who don't commute to work or drive late at night.

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