Telematics: savings vs privacy concerns

In recent years, GPS navigators and tracking systems have become popular options for consumers wanting to abandon the paper map and get to their destinations quicker. GPS has more potential than just as a navigation tool though, and has been adopted into telematics systems. These are not only capable of giving people detailed directions to their destinations, they also trade data with other GPS navigators to provide drivers with up-to-the-minute details on road conditions, severe weather developments, and traffic flow. Insurers also realised that the data from these could be used to reward good drivers too.

Telematics Insurance

In an effort to reward their safe drivers, many insurance companies now offer telematics insurance. This type of insurance, which is sometimes referred to as black box insurance, enables your provider to gain access to your driving statistics. These statistics are usually logged by a special GPS device that is given to you by your insurance company. After installing it in your vehicle, this black box tracks your driving duration, acceleration speed, braking consistency, and handling around corners. There’s more about how telematics works on sites like

Benefits of Telematics

The main benefit of telematics insurance is that drivers are rewarded with discounts, additional benefits, and special deals if their driving data indicates that the individual drives safely and consistently. If you’re a good driver you could drastically reduce your premiums by using telematics insurance, especially young drivers who often face the highest premiums as their age group is responsible for a disproportionate number of accidents. Good drivers who happen to be young can often cut their insurance costs in half.

These telematics boxes provided by your insurance company also often come equipped with anti-theft tracking software. This means that if your car is stolen you — and the police — will be able to track its location. This way you may be able to recover your car and help in the arrest of the criminals who took your vehicle.

Privacy Concerns

Despite all of the cost and time benefits provided by telematics insurance, do we really want GPS devices monitoring our every move? In fact, telematics is advanced enough to track our car’s movements to within centimeters, giving your insurance company an accurate picture of where you are driving, and at what time of day you are driving, too. If you already have a phone with you in your car or a GPS satellite navigation system, you’ll already have your movements tracked though. Telematics insurance policies have strict controls over your data, so there’s no worry about your wife or boss finding out about your trips to the big game when you should have been working.

Although there are various privacy concerns related to telematics insurance, the coverage does offer unique insurance savings opportunities that are not available to regular drivers. Especially for young drivers the savings are often far more important than a slight decrease of your privacy.

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Published on: March 7, 2014

Filled Under: Cars

Views: 4210

One Response to Telematics: savings vs privacy concerns

  1. Ethan D. says:

    Yes I agree, telematics insurance is well worth it even if you do sacrifice a bit of privacy. For those of us that drive sensibly it’s a big saving.

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