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Car Insurance Monitoring Device

  • Tabitha Naylor
  • August 6, 2013 9:00 AM
  • 1 Comments

car-insurance-monitoring-device

Car insurance rates have risen substantially over the last 15 years, which has led to drivers struggling to make their premium payments. As a way of helping drivers lower their premiums, insurance carriers have come up with a way for drivers to prove they are safe drivers thereby meriting lower insurance rates.

If you are a driver who will do anything to lower their car insurance rates, then consider allowing an insurance provider to install a small wireless gadget in your car; one that monitors your safe driving habits. These gadgets capture driving activities and send the data to the car insurance company to be analyzed. Many drivers are now volunteering to have these small monitors placed in their car proving  their safe driving habits, thus qualifying for lower car insurance quotes.

Online car insurance companies, as well as the more conventional car insurance provider, are now opting to use these devices instead of the proxies they have used to guess the driver’s likelihood of an accident. These proxies included factors like age, sex, miles driven, marital status and credit scores to determine a driver’s safe driving.

These new driving monitors offer a more reliable reading of the risks a driver takes. The device works by collecting driving data for the policy holder. The only drawback is that a car insurance policy holder must volunteer to have the device installed in the car. Once connected, the device communicates with the car’s computer system via the diagnostic port.

Most car insurance providers use this monitor effectively in many states throughout the nation, and its popularity is spreading. The device, known as Drivewise for Allstate, is used in 10 states. State Farm uses their version of the Drive Safe and Save device in 22 states, and Progressive uses Snapshot in 43 states.

Why are Insurance Consumers Giving their OK?

Apparently, if you can prove you are a safe driver to an online car insurance company, you qualify for insurance rate discounts of up to 30 percent, which is quite a substantial savings.

What Does the Device Record?

Most of these car devices record the time of day you drive, the distance you travel and the vehicle speed. They don’t hinder driver’s privacy as these aren’t equipped with a GPS locator, so insurance companies can’t track where a driver is located.

The Displayed Data

Once installed, most drivers can log onto the statistics website and refer to the graph that shows the time of day driven, miles driven, number of ‘hard brakes, extreme brakes,’ and the amount of time driven more than 80 miles an hour. The device is not designed to know what roads you travel, whether you go 50 miles in a 30 mile an hour restricted area.

How Long Does a Policyholder Have the Device?

Car insurance companies usually require you keep the device for six months, after which, you can remove and return it to the insurance provider. During this drive time the insurance carrier will determine your safety worthiness and implement a discount for you. This gives you a customized price for an indefinite time.

It is a Completely Voluntary Activity

Carrying the monitoring device in the vehicle is completely voluntary, and policy holders can withdraw from the project at any time. Many insurance companies offer the program to both existing customers and those who are potential customers. Non-insurance company customers can install the device for a trial period, in the hopes of getting a better car insurance quote. However, an insurance company needs the device data for about 30 days before they can offer any type of discount.

Acceptance

Although the monitoring device has existed for a number of years, it is more widely accepted now than when it first hit the market. Almost 30 percent of new customers sign up for the device installation when it is offered by online insurance providers.

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