COVID-19 changed our world. Some changes due to the pandemic will pass over time. Others may affect behaviors for years to come. With many people now working remotely, driving patterns have changed for many households. This trend began before the pandemic, but COVID-19 forced many employers to offer remote options. In many cases, it may make sense for businesses to keep those options in place, affecting commuting patterns in the years ahead.
The timing of these changes in driving and commuting to work coincides with the rollout of usage-based insurance options. These innovative programs can take several forms, ranging from simpler auto insurance policies that charge premiums based on per-mile usage to standard insurance policies that offer rates matched to your driving safety and mileage. The latter is more commonly available.
Telematics as a usage-based insurance rating factor
Telematics refers to devices in your vehicle that can collect data and communicate that information. You might remember the ads on TV for cars that can call for help if you‘re involved in an accident. You might even own a car that can do this. That‘s one example of telematics in action.
In an insurance context, telematics can be used to collect driving data and convey that information to your insurer. There are several ways to achieve this, but mobile apps for this purpose have become a popular solution.
Here are some of the things telematics devices or apps may monitor:
• Driving speed
• Miles driven
• Time of day
• Braking events
• Fast starts
Because of the scope of information available to insurers, usage-based insurance in this case also becomes safety-based insurance.
Many insurers offer a discount to get started with their telematics program and each insurer has a different marketing name for the technology. In many cases, after the initial discount expires, you can earn lower rates by maintaining safe driving habits, but also by keeping your mileage usage down.
Often, you‘ll have access to reporting through the web or an app, giving you a better understanding of your overall driving safety and how many miles your drive. Some apps can even alert you in real-time when you go above the posted speed limit, which helps you drive safer as well as avoid speeding tickets. Moving violations can cause rates to increase, so telematics may be able to save you money in more ways than one.
Discuss your options with your broker.
Telematics and other usage-based insurance options can be an effective way to save money on insurance. But there may be other ways to save money as well. There may also be other aspects of your coverage you might want to update.
A periodic insurance review helps you capture new savings opportunities as they become available and ensure your coverage matches your current needs