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Telematics is a form of information technology that monitors assets such as cars, trucks and fleet vehicles, and transmits the data over long distances. The information collected from the black-box type sensors and smartphone applications is sent to remote receivers to be parsed and analyzed. Telematic solutions are employed by automobile insurance companies to assess and price driving risk profiles for their insureds. This is called usage-based insurance or UBI.  

As an attorney, like one of the Auto Accident Lawyers Indianapolis, IN residents trust, I frequently consult with friends, family, and clients about their automobile insurance policies and the coverages they have in place. Although not everyone would benefit from a usage-based automobile insurance plan, it’s worth looking into. While some feel device tracking is intrusive on their privacy, many, especially those with safe driving habits, are willing to be surveilled in this way. One insurer claims that a customer can save as much as 50% by signing up for their usage-based insurance plan; while other companies make the claim for an average savings of 20% – 30%.

Telematic devices may be easily self-installed or come factory-equipped on your vehicle. If your car was manufactured prior to 1996, the dongle-style device probably will not be compatible. Initially, the insurance company charges the UBI customer the standard insurance rate. After a fixed amount of time has elapsed (usually months), the customer may see a premium increase or experience a reduction in their premium that is reflective of their driving risk. What behaviors are considered high-risk?

The devices transmit information such as driving style, speed, brake and acceleration patterns, air-bag usage, cornering, type of roads driven, and distance traveled. But by and far, a reduction of the number of miles driven and avoiding rush hour drive times can go a long way toward a reduction in rates. In California, for example, long commutes along with stop ‘n go traffic are an unavoidable way of life. Since these issues are already factored into California’s UBI plan, drivers from the Golden State may find advantages to a user-based insurance plan. Otherwise, a user-based insurance plan will generally reduce premiums for people who live near their place of work and drive on level surfaces.

If you or someone you know would like to discuss automobile insurance, contact your auto accident attorney for an in-depth explanation of coverages and policy options available to you.

Thanks to our friends and contributors from Ward & Ward Law Firm for their insight into personal injury practice.


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