Telematics: 5 Reasons You Should Try "Pay How You Drive" Car Insurance

With the ongoing development of technology in cars to help us drive safely, there is an opportunity that is being offered by some insurance companies to help raise awareness of your driving behaviors. It’s a feature that also may help to lower your car insurance costs. It’s known as telematics technology, usage-based insurance or “Pay How You Drive” car insurance. While each insurance company has its own version of this technology, there are some common elements of these programs that may inspire you to check out a “Pay How You Drive” program.

Here are five reasons you might want to try “Pay How You Drive” car insurance:

1. The savings. Who doesn’t like to save money, especially on a household expense that you know you need? With “Pay How You Drive” programs, you can potentially save on your car insurance premium for safe driving habits, but riskier drivers may get a premium increase. In some cases, depending on the program you sign up for, you may get a discount for enrolling. You also may earn savings that will be incorporated into your car insurance policy for as long as you remain a customer of that insurance company. This can add up over time, potentially generating considerable savings, depending on your insurance carrier.
2. The opportunity to benefit from your good habits. With a telematics-based program, your driving behaviors are monitored. Participating in a program that uses telematics may help raise your awareness of these behaviors, so you can learn from them and drive more safely. If you’re a parent of a teenage driver, a program like this may have added appeal to help coach your teenage driver. In general, you can use telematics to have more control over and potentially reduce your auto insurance expenses. That means you can influence your insurance rates in a positive way. For example, if you’re the type of driver who has made a habit of maintaining a safe operating speed or you always keep a safe distance between your car and the car in front of you, a telematics-based program might be an attractive option for you.
3. These programs typically are easy to sign up for and use. The everyday use of mobile phones has helped spur the evolution of telematics-based programs, with most programs operated through an app on your personal cellphone. Each insurance company will have its own manner of enrolling you, but in general, these programs are simple to join and don’t usually require you to do much more than sign up.
4. The program is voluntary. Insurance companies are encouraging customers to voluntarily try a telematics-based program because it can help heighten drivers’ awareness of their driving behaviors and potentially lead to their adoption of safer driving habits. The knowledge you would gain from participating in a telematics-based program could help you learn more about your own driving habits, which could, in turn, help you take steps toward becoming safer behind the wheel.
5. The collective impact. Your participation in a telematics-based program may seem like an individual experience, and it is. But consider this: Drivers participating in a telematics-based or usage-based program may be more mindful of their driving habits, helping to make driving a safer experience for themselves and those with whom they’re sharing the roadways. Your participation in a “Pay How You Drive” program can become part of the larger community of drivers who are adjusting their behaviors, increasing the collective safety on the road.

How do “pay how you drive” programs work?

In general, a telematics-based program collects information about your driving using mobile app technology. Generally, once you sign up for a program, you download the telematics app and enable some features on your mobile phone and begin to drive. Without going into the details of how it scientifically works, essentially what you need to know is that the technology begins to collect data related to your driving habits as you drive.

Typically, “Pay How You Drive” programs are monitoring a handful of variables for a short period of time. For example, the Travelers IntelliDrive^® app is a 90-day program to capture your driving habits in that time. There are four variables that IntelliDrive grades you on, to generate a score to apply to your premium.¹ These factors or a combination of them have been shown to increase or decrease the risk of an accident:

• Time of day: When you drive can be as important as how you drive.
• Speed: Keep your speed in check so you have more time to react.
• Acceleration: Smooth acceleration is easier on your car and good for your score.
• Braking: Drivers who anticipate situations have fewer hard brakes.

How do you sign up for a “pay how you drive” program?

Ask your insurance agent if there is a “Pay How You Drive” program available in the state in which you live and find out what’s needed to sign up.

While pricing is not the only reason for selecting an insurance policy, it can be rewarding to benefit from your good driving habits when a program is offered that recognizes you as a safe driver. Check out Travelers car insurance product and IntelliDrive here.

¹The IntelliDrive Program is subject to state availability and individual eligibility. Smartphone must meet compatibility requirements and drivers must be able to download and use the IntelliDrive app. The IntelliDrive Policy Score is based on all drivers in the household and variables derived from collected driving data for enrolled drivers. The IntelliDrive Program rating factors are applied to each eligible vehicle premium and may not apply to all coverages or vehicles on the policy. Individual savings will vary and not all policies will see a savings. Individual driving data is used to rate policies. The timing and ability to opt out of the program varies by state. Terms and conditions apply. All data collected is used in aggregate for research purposes or as provided under IntelliDrive's Terms of Use. For more detailed information about the program, visit Travelers.com/IntelliDriveProgams.