Insurance companies are using car gadgets to compare insurance rates and provide cheap car insurance.
These gadgets are telematic data recorders that are installed in your car to collect information about your driving habits.
The recorder is about the size of a smart phone and insurance companies install it under your dashboard or hood to wireless transmit information.
The recorder doesn't damage your car or affect your warranty but it can lower your insurance.
The information collected (telematics) allows an insurance company to monitor your driving behavior.
This data includes what distances and directions you travel, where and when you drive, what type of roads you travel, how fast or slow you drive, how you brake, how you corner or change lanes.
It's like having an insurance agent sitting beside you while driving.
This isn't good if you don't want to share your driving tendencies with anyone. If you like to roll through stop signs, speed, or follow too closely then these car gadgets aren't going to lower your insurance premiums.
But they could convince you to change your driving habits, make you more responsible, and help prevent getting yourself or someone else killed or injured.
Young drivers are statistically high-risk. If you're a young responsible driver you're unfortunately penalized just because of your age.
For example, figures indicate that young drivers are involved in 40% of all fatal accidents occurring late at night.
So if your a young driver, insurance companies are going to charge you a high premium regardless of whether you drive at night or not.
So these telematic car gadgets help to distinguish drivers from being statistically included into a group category.
In the United Kingdom, Co-operative Insurance offers telematic insurance. According to David Neave, a Director at Co-operative, young people are being priced out of owning a car because of the rising costs of insurance.
"To ensure we do not end up with an entire generation priced out of car ownership we are giving them a chance to prove themselves as responsible drivers, and dispel the assumption that all young drivers will drive badly and have accidents," says Neave.
In the United States, Exigen Insurance provides telematic car gadgets. Fazi Zand, the vice president of marketing and business development for Exigen says that competition for telematic-based insurance is heating up and insurance companies must provide this innovative service or risk losing their customers to competition.
Telematic insurance coverage varies depending on the policy. There is usually an initial premium payment. The recording device may also be included at no cost. It's removal may include an additional charge.
Your policy and telematics may limit information to only driving between 11 pm and 6 am with a penalty fee if you drive during that time period. There may be mileage rates added to your premium if you drive during rush hours or drive high-risk routes, exceed speed limits or have excessive hard braking.
Alternatively, if you drive fewer miles, don't speed, don't drive late at night and avoid rush hour traffic, you could get cash back , get a decrease in your monthly premium or receive a large discount upon renewal.
On board dashboard displays allow you to view your information so you can see your rates increasing or decreasing based on your driving behavior. This allows you to calculate how your rates are affected by what you do with your car.
These car gadgets provide a statistical proven record of how you drive, which can lower your insurance each year. Other advantages include claims management and car theft recovery.
In the event that your involved in an accident the gadget could prove you were not responsible. If your car is stolen, the vehicle can be tracked and recovered.
These telematic car gadgets were designed to be driver oriented based upon individual driving habits rather than price oriented based upon group profiling.