In order to understand your car insurance rates, start by imagining a gigantic and empty in-ground pool. Every time people sign up for a policy, they throw their money into the pool. Drivers of small cars who have stellar driving records each throw in a little bit of money. Monster truck drivers with a history of accidents throw in more. Teenagers throw in a big chunk of change. The pool starts to fill up with money, and no one gets to take any from the pool without permission and a really good reason.
The only way to get money from the pool is to be involved in a car accident. Obviously, we hope that never happens, but if it does, there’s always the pool. Some people will never take money out of the pool, but they will continue to put funds into it. Some will take a lot of money out over their time paying money in to it. It may even seem like some people take an unfair amount from the communal funds. Drivers with a history of accidents and tickets are penalized more after incidents, and their rates go up often, but they are still taking way more out than they are putting in.
Is this system fair to the good drivers? Why are they paying in to have the pool used by other people who aren’t as responsible. Responsible people have accidents, too, but they probably don’t have 10 of them in a row that are considered their fault.
Good Drivers Can Prove It
As a way of saving safer drivers money, some insurance companies are offering programs that reward good drivers for being just that. A monitor is installed in the car that sends data to the insurance company based on driving habits. The device, often called a “tattler” tells the insurance company how fast you drive, during what hours you drive, how far you drive and how often you drive. They then use that data (and other information that is pulled from the monitor) to set rates based on what the driver is actually doing. Slow drivers who don’t drive very often are going to have lower rates than people who get caught by the insurance company blazing through town at way above the speed limit.
Less Money For Less Risk
The idea is that you only have to pay for the insurance that you need because the insurance company knows what kind of risk you are for them. You aren’t throwing a disproportionate amount of money into the big pool anymore. You’re tossing in just the dollars that your driving habits require. A lot of really good drivers love this option. Some of the less-than-stellar drivers think it’s unfair because their rates will go up if there is less money in the pool from those who don’t tap in to it very often (if at all).
It Can Only Help
The good news is that if you aren’t the best driver and decide to sign up for the monitoring device, you won’t be slapped with higher rates when the insurance company finds out. They only use the information to lower your rates, if possible. That could change at any time, but for now, the tattler can’t cause you any more trouble. It’s just there to help you save money if your driving skills meet their standards.
A Tattle Tale Doesn’t Have To Be A Bad Thing
If you don’t mind the idea of having a device in your car that will track your every vehicular move, then you can probably save a fair amount of money if you stay within the guidelines. The program isn’t for everyone because there are plenty of drivers in the world who won’t be helped by it, but the good drivers of the world can rejoice for a minute in the ability to save some cash and not pay for the mistakes of the other people on the road.