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Telematics!! – Tele What???

By June 17, 2024No Comments

Your Insurance Guy – Jim King

Telematics!!

Tele What???

 

If you haven’t heard the term Telematics, yet, you will. So, what exactly is Telematics and why should you care?

At a high level, Telematics is the ability to collect information and use it to make decisions or better understand what is happening or has happened. Telematics under another name has been used for years, actually decades in industrial settings to constantly improve manufacturing processes. At its core it is the collection of data to reduce waste, improve yields and deliver a better more reliable product to the customer.

In the aerospace industry, a version of telematics called Prognostic Health Monitoring (PHM), is used to monitor the health of the engines while the aircraft is in flight, informing the pilot if there are any issues that need attention. As in, “next time down have the technicians take a look at the engines” or….”.you need to find a place to land…right now”!

So, why is Telematics important in the insurance world? Well, quite simply at some point in time in the future and I mean the not-too-distant future, your auto insurance premium will be calculated based on data provided by Telematic systems. Essentially, your premium will be determined on how you drive. It leads to a highly individualized insurance premium.

There are currently sensors in your car that can detect and report on a number of the operational characteristics of your car. When you bring your car in for service, the technician plugs in a portable computer and downloads the diagnostic report from the computer in your car and looks at the various error codes that then lead him down the path of which service needs to be performed.

Those same sensors that provide the diagnostic information as well as other sensors in your car can look at and record how your car is being driven or perhaps more accurately, how you drive. The sensors can detect the rate at which you accelerate and more importantly the rate or severity at which you brake and the frequency of those events. There is other data that can and will be collected and when combined, the data will be used to create a profile of you as a driver. Your insurance premium will then be determined on your unique driving style. Good for those that are “good drivers”. Not so good for those that are, shall we say, a bit more reckless.

It doesn’t end there. You know the GPS in your phone that knows where you are and where you are going? It would be naïve to think that phone data won’t also be part of the picture your driving profile. There are sensors in your phones (accelerometer) that can provide data which is especially useful in the event of a crash. The data from the accelerometer in your phone can provide information about how fast you were going as well as the impact force of the crash. Although there are privacy laws to consider you can bet that insurance companies are going to lobby hard to make sure they have access to data available in both your car and your phone in the event of an accident.

It is going to be very interesting to watch this all unfold but be prepared for the future and a time when all the data about how you really drive is available to your insurance company.

Please feel free to call us with any questions or concerns about your insurance coverages. We are happy to help. We are here to answer any questions. You can reach us at 617-484-5216 (yes, we do answer the phone) or email us at .

Alternatively, please visit our website www.waverleyins.com