Telematics is a general term for the technology which enables information about the driving and location of a vehicle to be transmitted and analysed.
Initially, it was developed to enable transport businesses to track and monitor fleets of vehicles. This not only provided a business with precise data about the location of all vehicles, it also provided data about how the vehicles were being driven, which enabled a business to instruct drivers how to drive in order to achieve better fuel economy.
In a country like India, where road haulage faces challenging conditions, telematics is rapidly transforming the management of vehicles and their drivers. The telematics market in India is expected to be worth in excess of 300 million US dollars by 2021.
In the UK, whilst telematics is increasingly used in a business context the biggest expansion has been in ‘usage based insurance’, with well over a million British cars now fitted with a telematics black box.
The black box, which can be fitted to the dashboard or under the bonnet, is comprised of a GPS system, a motion sensor, a sim and software. It provides data on the times of day when you drive, the speed at which you drive, your braking and acceleration, if you take breaks on long journeys and where you drive.
Your insurance premiums are calculated on your personal data instead of general statistics. This means that if you are a safe, careful driver and you are driving in safe locations at safe times of the day, you could find yourself paying much lower insurance premiums.
For 62% of UK drivers under twenty five the cheapest insurance premiums are with telematics. This is a system which rewards and encourages safe driving: drivers have access to the data which is collected and can modify their driving accordingly.
Although in most cases you will have to wait for an annual renewal to reap the benefits of your good driving, there are some providers who offer a monthly adjustment.
The data remains private, unless requested by the police, however the ownership of the data is yet to be resolved: some companies regard it as the property of the driver, and hence transferable, others regard the data as property of the company.
Although there is no charge for installing the equipment, there may be a charge for cancellation or disconnection.
Telematics is clearly a fairer way of calculating insurance premiums, you are not paying for the poor driving of other people and because it is educative it should result in a reduction of accidents and lower fuel consumption. So it’s good news for other road users and it’s good news for the environment.
Some policies, however, come with restrictions on where and when you can drive, so it is possible that if your drive to work is through difficult driving conditions, at busy times of the day, you could find yourself paying increased premiums.