How Do Those Car Insurance Tracking Devices Work? - U.S. News & World Report
Key Takeaways
- Car insurance tracking devices are either plugged into your car's onboard diagnostics or downloaded as an app on your smartphone.
- These devices monitor your speed, acceleration, braking, and other details each time you drive and report the information to the insurance company.
- Car insurance companies use the data they gather from the tracking device to adjust your premium or offer a discount.
Car insurance tracking devices work by allowing insurers to monitor your driving and set rates that accurately reflect your level of risk. A car insurance tracking device can be placed in your vehicle or accessed via a smartphone app.
Usage-based car insurance (UBI) programs that utilize tracking devices are becoming more popular as they may translate to cheaper car insurance rates for safe drivers or drivers who aren't on the road often.
Before you decide if a program like this is right for you, it's important to understand how these devices work, what information they track, and how they affect your rates.
An insurance tracker is a telematics program that collects data about your driving habits. There are two main types of auto insurance trackers available:
- A physical telematics device, also known as a dongle, that is installed or plugged into your vehicle.
- An app that you can download onto a smartphone.
The one you use often depends on your insurer and the program you choose.
Regardless of the type of tracking device involved, your insurer will use the device to collect specific information about your driving habits, including speeding, braking, distance driven, time of day, and other behaviors. Typically, insurers provide the device as part of a usage-based insurance (UBI) program.
This type of insurance is also sometimes referred to as black box car insurance. Those who need black box car insurance sometimes include drivers who are viewed as risky due to driving record or inexperience. But a policy like this can also work for a motorist who simply doesn't drive much and wants a pay-per-mile rate that reflects their vehicle usage.
Progressive's Snapshot was the first UBI program in the United States, but other insurers have followed suit. Today, consumers can choose between several driving tracking programs, including Drivewise by Allstate, DriveEasy by Geico, and Drive Safe & Save by State Farm.
These telematics programs are not required; you have to opt-in and use the dongle or app to track your driving. If you don't save any money with the program, you should be able to opt-out again without an issue.
Keep in mind that each insurer has its own program rules and restrictions, and you should contact them if you no longer want to participate. Unplugging the device or not using the app can alter your premiums or cancel any discounts.
How an auto tracking device works depends on the equipment your insurer uses.
If your insurer uses a stand-alone device, it's typically plugged into your onboard diagnostic (OBD-II) port, which is commonly found beneath the steering wheel. This method relies on your car's onboard diagnostic system and a network of sensors that tracks key performance indicators like fuel and oil levels, mileage, and tire pressure.
Once installed in the OBD-II port, the device can collect information about where and how far you drive, your speed, and your breaking patterns, among other things.
If your insurer relies on a mobile tracking device, all you have to do is download the app, follow your insurer's instructions, and start driving. The smartphone app uses the sensors built into the phone to gather data on your driving. It doesn't have direct access to information gathered from your vehicle's OBD-II port, but it can detect behaviors like sudden acceleration and hard braking.
Regardless of which method your insurer uses, the information collected is typically encrypted and sent to the insurer. The data will be used to evaluate your driving habits and determine your rate and any other discounts or program benefits you are eligible for.
Most insurance companies that offer tracking programs disclose what data is collected. You can typically find the information on their website or by contacting an agent. Generally, they're looking for information that illustrates your usual driving habits, particularly habits that could lead to accidents or help you avoid them.
Typical data collected includes:
● How often you drive and for how long.
● Hard braking
● Hard acceleration
● Speed
● Fast cornering (quick, sharp turns)
● Time of day, especially nighttime driving
● Phone usage while driving
When the insurance company receives this data, they will use mapping data to see what kinds of traffic controls, such as stop signs and speed limits, are in place where you were driving. In doing so, they can determine if you're a safe driver who follows the rules of the road, or if you frequently speed, run stop signs, or otherwise have poor driving habits.
Depending on the program and tracking method (i.e., plug-in dongle or mobile app), they may also be able to tell if you were using your phone while driving, a habit that is generally labeled as "distracted driving."
Your insurer will use this data to set your rates, but the information collected can also be useful to you. Smartphone apps often include a dashboard and feedback so you can see how you're driving. If you see a lot of quick starts and distracted driving, you can adjust your behavior to improve your driving and, potentially, your auto insurance rate.
Compare Car Insurance Quotes
Get free personalized quotes with one simple form.
There are benefits as well as drawbacks to letting these telematics systems or trackers monitor you. They'll make the most sense for you if you want to take advantage of specific programs offered by your insurer, such as usage-based insurance (UBI). UBI programs establish rates based on how you use your car. Letting the device track you could be a net positive if it lowers your premiums—or it could cost you more than other insurance types.
Pros
- Save by being safe. If you're a generally safe driver – you don't speed, aren't prone to hard braking, and stay distraction-free – you may find that UBI programs reduce your rates.
- Drive less, pay less. UBI programs may also be useful for drivers who aren't behind the wheel often. Pay-per-mile insurance coverage uses a tracking device to monitor the number of miles you drive over a period of time, typically four weeks. In return, you pay a base rate for insurance and an additional per-mile rate. If you work from home, then a pay-per-mile plan can help you avoid overpaying for insurance, because you're not driving to work every day.
- Improve your skills. Allowing your insurance company to track your driving can let you know if your driving could use some improvement and help you build safer habits.
Several insurers, including Geico, USAA, and State Farm, offer usage-based insurance programs, but fewer offer true pay-per-mile or pay-as-you-go programs that exclusively link your rate to mileage. If you're looking for a mileage-based insurance program, then you may want to consider Milewise by Allstate. There are also a handful of insurers, including Mile Auto and Metromile, that specialize in pay-per-mile coverage.
Cons
- Long commutes could cost more. It's important to note that if you have a long commute and let your insurance company track you, those miles could drive up your insurance costs.
- Distracted driving could get expensive. If you continuously engage in risky driving behavior, then you could pay more for telematics insurance than for a traditional policy.
- Goodbye privacy. Allowing an insurance company to track your driving data and whereabouts means giving up your privacy—and you risk the company selling your information to a third party.
Most national insurance companies offer tracking-based insurance, but programs vary. Many of the insurers below offer usage-based insurance (UBI) programs that reward you for safe driving. However, each company may use the data they collect in a different way, so it's important to ask what information is collected and how it impacts your rate.
By monitoring your speed, driving frequency and braking habits, your insurance company gathers information about your driving behavior and how much time you spend on the road. They can use this to better price your premiums according to their risk in insuring you.
Yes, it's possible for these trackers to save you money on your car insurance premiums. If you're a safe and responsible driver and you don't drive often, an insurance tracker can report this back to your insurer, who can then offer a discount on your premium.
If the insurance company can access your GPS data, they may be able to track your location. However, they're more likely to be concerned with how you drive, rather than where you drive.
Learn More
For more information about auto insurance, see the following guides:
At U.S. News & World Report, we rank the Best Hospitals, Best Colleges, and Best Cars to guide readers through some of life's most complicated decisions. Our 360 Reviews team draws on this same unbiased approach to rate insurance companies and agencies. The team doesn't keep samples, gifts, or loans of products or services we review. In addition, we maintain a separate business team that has no influence over our methodology or recommendations.
U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.
Comments
Post a Comment