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What is this technology called telematics, and how can it help teen drivers stay safe on the road? Today’s cars record and store all manner of information or data. That data and the method of transmitting or harvesting it is called telematics.
You may not know it, but your car is an open book. As does your phone, your car can keep track of where it is, where it’s been, and a timeline of your movements. It can know when you drive, where you drive, and how fast you drive. Your car can recognize when you accelerate aggressively or brake harshly. It can even record seat belt and smartphone use.
The newer your car, the more comprehensive the gathered data is likely to be. Unlike your smartphone, you can’t turn off your car’s data gathering. You can’t remove the battery or sim card. The data collection occurs whether you want it to or not. All a third party requires to access this information is a court order or your permission.
You see, just like a superpower, people can use telematics for good or bad. But where your teen driver is concerned, telematics can be a valuable tool for monitoring driving habits and behavior. Additionally, it can even work to lower your insurance premiums. In this article, we’ll take a closer look at telematics and how it can work to your advantage when it comes to the safety of your teen drivers.
- What is Telematics?
- How Do Telematics Work?
- How Telematics Can Affect Teen Driving
- Telematics and Usage-Based Insurance (UBI)
- Should You Have Telematics Insurance for Your Teen Driver?
- How to Get Telematic Insurance
What is telematics?
In a nutshell, telematics marries data gathering with data transmitting.
Whether your car provides telematics in General Motors’
GM,
OnStar or similar connected systems many car makers offer, it still gathers some information.
Black box data
Cars have something like an airplane’s “black box.” It’s called an Event Data Recorder (EDA). Although the type of data gathered and the amount of data stored varies, crash investigators often tap into this data. With it, they can determine many facts about what a vehicle was doing at the time of a crash.
Car technology that gathers data
If your car has connected technology, some teen driver preventions, or any GPS technology, it gathers, transmits, and stores lots of data.
Third-party plug-in devices
There are also third-party telematics devices supported by insurance companies, fleet-management services, etc. In this case, a device is plugged directly into your vehicle, noting everything your car does.
In other words, it’s like having a personal assistant. This assistant would follow you around, taking notes about everywhere you go, everything you do, and every word you utter.
Related: 5 tips for young drivers to help lower car insurance
How do telematics work?
Let’s imagine for a moment your vehicle is a newer model sporting a connected service like OnStar, Hyundai’s
HYMTF,
Blue Link, or Honda’s
HMC,
HondaLink.
These are systems that can find your car, lock or unlock your vehicle, remotely start your vehicle, and so forth.
A tracking device located somewhere within your car’s computer system logs your vehicle’s location. It also gathers other vehicle-specific data. It transmits that data to a centralized server through a cellular or satellite network. The server translates the data, which can be seen in real-time and stored for future access.
The scope of data gathered depends on the specific telematics device but can include:
- Location
- Time of day
- Vehicle speed
- Trip distance
- Aggressive acceleration
- Harsh-braking incidents
- Aggressive cornering
- Idling time
- Fuel consumption
- Seat-belt use
- Smartphone use
- Maintenance history
- Other engine data
How telematics can affect teen driving
You and your teen driver can benefit from telematics in two distinct ways. First, a regular review of your teen’s behavior behind the wheel is a learning opportunity. Discussing good and bad behavior reinforces lessons learned in driver training.
Second, telematics is helpful as a parental alert when a teen violates preset driving rules. The parent receives real-time alerts signaling when the vehicle exceeds the speed limit, is driving beyond a driving curfew, outside an established boundary, or has performed other violations.
Some car makers offer telematics just for your teen driver. For example, GM has “Teen Driver,” Ford
F,
offers “My Key,” Hyundai has teen-driver aspects to its Blue Link. These telematics systems provide parental warnings in several areas like breaking a driving curfew, excessive speed, and more.
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Telematics and usage-based insurance (UBI)
Usage-based insurance has been around in one form or another for over 10 years. Starting as insurance with premiums based on miles driven, it has morphed into something much more sophisticated.
The Progressive Insurance company is most often associated with pioneering UBI. However, every primary car insurance carrier has gotten in on the act.
How insurance providers gather vehicle data
Methods for gathering your data vary from insurance company to company. Your car’s connected system, a device plugged into the onboard diagnostics (OBDII) port, or a smartphone app provide the tracking source. Some insurance companies use a device called a “tag” that attaches to your windshield and pairs with your smartphone to collect data.
Review periods vary, but your insurance company will monitor your data once you opt into UBI. Based on the data, the insurance company, at some point, will adjust your premium to reflect the amount of risk your driving habits pose.
Your premium may decrease or increase based on your (or your teen’s) driving habits.
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Insurance companies that offer telematics insurance
Among the countrywide car-insurance carriers offering telematics UBI:
-
Allstate
ALL,
-1.19%
—Drivewise - American Family Insurance—KnowYourDrive
- Esurance – DriveSense
- Farmers—Signal
- Geico—DriveEasy
- Liberty Mutual—RightTrack
- Nationwide—SmartRide
-
Progressive
PGR,
-0.43%
—Snapshot - Travelers Insurance—IntelliDrive
- Safeco – RightTrack
-
State Farm
STFGX,
-0.98%
—Drive Safe & Save - USAA (restricted membership) – SafePilot
Should you have telematics insurance for your teen driver?
Although you can probably secure a separate insurance policy for your teen driver, doing so is cost-prohibitive. It can run you more than twice as much as simply adding your teen to your existing policy, which is already expensive.
The question then becomes: Should you opt for a UBI policy to lessen the financial pain of insuring your teen driver?
Ask your insurance agent that question, and the answer will probably be a resounding yes! If so, your agent would not necessarily be stretching the truth. It’s not outside the realm of possibility that UBI might decrease the extra burden of insuring a teen.
The added benefits of monitoring your teen’s driving behavior and even alerting you to any missteps might outweigh the risk of UBI increasing your premiums. However, UBI won’t just watch your teen; it will keep an eye on you and any other drivers of your car.
UBI examines more than bad driving habits
You may think to yourself, well, I’m a safe driver. Perhaps you are. However, UBI reviews involve much more than just identifying erratic driving.
Too much night driving, long daily commutes, the neighborhoods where you may park your car for long periods, and so forth can come into play. Even the times of day (rush hours) your vehicle is usually on the road can factor into the review.
These are all things to consider before pulling the trigger for UBI.
Other teen insurance discounts
But if you want to keep track of your teen driver or try to reduce the expense of adding a teen to your insurance, there are ways to do both. Although you and your teen driver may benefit from UBI in the form of reduced premiums, it’s a roll of the dice. Most car insurance companies offer discounts to teen drivers, among other more general discounts.
Also read: Why a used EV is a great choice for your teen’s first car
Two familiar sources of teen-driver discounts are school grades and safe-driver training courses. For example, Allstate offers its Smart Student Discount. Allstate opens this discount to single drivers age 25 or younger. Additionally, your young driver can qualify for this discount by being a full-time student achieving good grades. Another way to get a deal is to complete Allstate’s teenSMART driver-ed program. Also, attending school at least 100 miles from the car’s garage can save as much as 20% on insurance.
Many insurers offer the following types of car insurance discounts for teen drivers:
- Defensive-driving course
- Good student
- Accident-free/good driver
- Low mileage
- Away from home
Other ways to keep your teen safe while driving
Sure, UBI is one way to stay on top of your teen’s driving habits, but there are others. Many car makers offer phone-based apps that interface with your vehicle. The previously mentioned MyKey from Ford and GM’s Teen Driver are two examples. Not only do these technologies monitor driving habits, but you can also use them to set driving boundaries: driving curfews, speed limits, and geofencing.
Moreover, there are aftermarket telematics systems that just as effectively monitor your teen driver as factory-installed systems. Typically, these systems require a monthly subscription, but the cost isn’t overwhelming. They cost between $30 and $100. Monthly subscriptions cost as little as $8 a month.
How to get telematics insurance
There is no trick to securing telematics insurance. Most national and many regional insurance companies offer it. Insurance carriers are working toward a time when all car insurance will be UBI. Your insurance carrier will be eager to sign you up.
You would be wise, though, to discover the particulars of your carrier’s UBI because the risks may outweigh the potential rewards. It’s a good idea to ask what the average savings (and penalties) are before committing.
Shopping for UBI is a good time to switch insurance carriers because you may find a better deal elsewhere. Periodically shopping around for insurance makes financial sense anyway. As you grow older and your lifestyle changes, so do your risks. Life changes like relocation, a new job, a divorce, and so forth should trigger an insurance review. And so should switching to UBI and adding a teen driver.
This story originally ran on KBB.com.
