What do drivers really think about insurance telematics?

Should more insurers consider adopting this model? Most of the insurance customers who use these devices are pleased with the results.

Aside from fairness in pricing, telematics technology unlocks the key benefit of assistance in case of crash and claims filing. (Photo: Metamorworks for Shutterstock.com)

Technology is ever-changing and rapidly evolving, influencing our lives in ways that were previously unimaginable. The car insurance industry is one such area that has witnessed incredible innovation over the last decade. Auto insurance companies have adopted telematics technologies, prompting carriers to offer unique programs that can enable discounts on insurance for drivers based on how they drive.

But what do customers really think of these programs?

Clearsurance, the insurance marketplace that provides individual recommendations built on evaluations of more than 160,000 customer recommendations, independently collected thousands of customer reviews about insurance companies. The reviews were evaluated to better understand what customers think of the telematics programs available today.

Is there even an appetite for telematics-based programs?

First, let’s take a step back to understand more about telematics devices, which can help insurers record, process and analyze information such as driver speed, distances driven, time of day at which you drive, hard/fast braking and whether or not your phone is being used while driving. These telematics devices help you prove to your insurance company that you’re a safe driver. Insurance companies will often provide incentives, such as premium discounts or cash back, just for signing up for these programs, with additional rewards for continued positive behavior behind the wheel.

Clearsurance analyzed more than 160,000 reviews, including a subset of them to assess what customers really think about their driver measurement program. For the most part, customers rate insurers offering telematics devices highly. The average rating for all reviews mentioning telematics is 4.2 out of five possible stars. This indicates that most of the insurance customers who use these devices are pleased with the results.

Customers who praised telematics devices in Clearsurance reviews frequently mentioned their satisfaction with the car insurance discounts and savings they received. For example, in one customer review, a State Farm Drive Safe & Save user said their insurance bill continues to decrease because of savings from the telematics program. In another review, a driver using Nationwide’s SmartRide said they were able to lower their insurance premium by 35% with the program.

More consumers are choosing telematics

Cambridge Mobile Telematics (CMT), the telematics provider, ran several surveys recently focused on U.S. drivers’ appetite for different pricing, services and reward models. A total of 1,000 people were interviewed regarding their perspective on issues such as road safety, distraction and insurance pricing models. From a high-level, the study found:

That’s why CMT decided to use the very device responsible for distracted driving — the smartphone — to provide drivers with real-time feedback based on how they actually drive. This usage-based insurance model helps ensure drivers are priced on more accurate assessments of their driving, rather than outdated models for pricing premiums like credit score and where you live.

What are the benefits to drivers?

Aside from fairness in pricing, telematics technology unlocks the key benefit of assistance in case of crash and claims filing. Telematics has enabled companies such as CMT to provide telematics device-enabled and app-only solutions that are capable of recognizing a crash. Drivers see value in an insurance telematics app that can help them after a crash.

Beyond claims and pricing, some insurers also offer rewards programs. Insurance companies are providing rewards like Amazon gift cards in exchange for safe driving. These programs provide no reduction in premium, but they do provide value to drivers. They also make the roads safer. The programs give drivers feedback and incentives for things like not interacting with your phone while you’re driving.

What can be done next?

Leveraging telematics is one of the many ways that auto insurers can offer discounts. Those savings are based on the risk you represent. Your risk as a driver is based on data collection and assessment. You agree to that when you sign up to use one of the devices or mobile applications.

Not all programs are created equal, so it’s worth your time to do some research and find out what technology and benefits your insurer has available. And as mentioned above, while the majority of telematics programs are highly rated, it’s worth understanding the differences.

Overall, when shopping around for car insurance, telematics programs can save drivers hundreds on insurance. It’s worth considering an auto insurance program that uses your own driving safety to help you save money, become a safer driver and get more value from your insurance policy.

Michael Crowe (mike.crowe@clearsurance.com) CEO & founder of Clearsurance.

Ryan McMahon is vice president of Insurance at Cambridge Mobile Telematics. For more information, send an email to cmt@sourcecodecomms.com.

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