Understanding Insurance

What Is Insurance Telematics?

Telematics. It’s one of those high-tech words being tossed around these days but not many people seem to have a grasp on what it means. We’re here to explain what insurance telematics is and how it can help you take control of what you pay for your insurance — and hopefully make you a better driver!

How Does Telematics Work?

Telematics, in relation to car insurance, is a form of technology in your vehicle that can capture and process your driving data. A telematics device — more commonly called a car insurance tracker, safe driving app, or car insurance monitoring device, among other names — is installed in your vehicle so it can track your driving habits.

The device monitors things like the number of miles you drive, how quickly you brake or accelerate, and even the time of day you’re driving. The information the device collects is sent back to your car insurance company for review and — here’s the best part — depending on your driving habits, you can save money on your car insurance!

This kind of car insurance tracking is also known as usage-based insurance (UBI), or “pay how you drive.” In other words, the amount you pay for car insurance is judged by the standard of your own driving.

FYI: If the device shows that your driving habits aren’t so safe, you won’t be penalized with higher premiums. You just won’t get as high of a discount!

KnowYourDrive: American Family’s Usage-Based Insurance Discount

Now that you know what telematics means, let’s break down what it means for you. American Family Insurance has a usage-based insurance program called KnowYourDrive, which offers a discount on your auto insurance premium based on how well you drive. Depending on where you live, we’ll give you a small plug-in adapter for your vehicle (the telematics device), which fits into your vehicle’s onboard diagnostic port (OBD-II port) — while that name is a mouthful, installation is actually very simple! Then, download the affiliated app on your smartphone that shows your progress. The app sends the info to us so we can measure your driving habits and price your auto insurance in a way that rewards you for driving safely. You can earn a discount of up to 40%!

Learn everything you need to know about our KnowYourDrive discount.

What Are the Benefits of Using a Telematics Device?

Other than a potential discount on your car insurance premium, there are a number of benefits for using our telematics device:

  • First things first, you'll (most likely) become a safer, smarter driver. Since your discount depends on your driving habits, you’ll become more aware of things like your speed, braking, cell phone use, traveling at night and hopefully acquire many other safe driving techniques along the way. And, since everything is tracked through an app, you can monitor your driving habits to see what you need to do to become a better driver — and to get a higher discount!
  • Adjusting your quick acceleration and hard stops could also lead to better fuel economy, which leads to traveling more miles before you have to fill up.
  • A telematics device, like American Family’s KnowYourDrive adapter, gives you the ability to track the fuel cost and MPG for every trip you take.
  • You can easily check diagnostics, which sends updates through the app. This can save you unnecessary trips to the mechanic!

Check with your American Family Insurance agent to learn more about how our KnowYourDrive program rewards you for being a safer, smarter driver. Remember, you can earn up to a 40% discount on your car insurance premium!

Want to learn more about how car insurance tracking devices work? Keep reading.


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Related Topics: Discounts , Insurance Terms , Car Insurance , Safe Driving , Technology