In an ideal world, safe drivers would pay less for their car insurance and riskier drivers would pay more. Telematics programs help insurance companies work towards that goal.

When drivers take part in telematics programs, they get real-time feedback about their driving habits. The programs generally last at least 90 days, sometimes longer. That gives drivers an opportunity to correct their bad habits and earn a better rate.

As insurance companies get data from the driver’s habits, they can adjust the rate accordingly.

More and more insurance carriers are offering telematics programs to help customize auto rates. These programs vary by carrier, but they will generally monitor your driving one of two ways. They will use either a device that you plug into your vehicle or a mobile app on your phone.

What driving behaviors are monitored by telematics?

Most telematics programs check a combination of the following:

Miles driven
Time of day you drive
Hard braking
Quick acceleration
Cell phone usage
Speed

Pros:

1. You could save money on your premium!

2. Track your teen’s driving habits (or your spouse’s).

3. Learn more about your own driving habits and how to drive more safely.

Cons:

1. Depending on the program, your premium might increase if the results are poor.

2. Privacy, especially with the app.

This isn’t something I’m personally concerned about. If you use a smart phone, there’s a great chance at least one of your apps is already monitoring where you go and how you use your phone. At least this app can help save you some money.

3. If you don’t pay attention, you could get rated for a trip when you weren’t driving.

Telematics programs aren’t for everyone. If you know you have a lead foot, you drive long distances, or you often drive in the middle of the night, it might not be a good fit for you.

Before you decide whether to sign up for telematics, talk to your agent about the program offered by your insurance carrier. Then take the time to weigh the pros and cons for your family.

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