Telematics involves using technology to track vehicle movements to assess driving skills. With the auto owner's permission, a small device connected to the vehicle collects and sends driving data to the insurer. Similar data can also be collected via smartphone apps or through devices that are standard in many vehicles and used by the manufacturer to diagnose vehicle performance and maintenance needs. The insurer analyzes the information and shares its results with the insured driver. The data can be used as a determination factor in premium costs, rewarding good driving behavior with a lower rate, or to help new drivers learn more about safe-driving techniques.
The National Association of Insurance Commissioners forecasts that the use of telematics may grow to 20 percent within the next five years. Telematics can measure how drivers break, accelerate, and handle corners. It also collects information on location, length of drives, and time of day the vehicle is in motion. Like data collection in other industries, there are existing legal questions regarding ownership and privacy of the data provided by telematics. Additionally, how insurers collect, maintain, and use that data are critical operational decisions and are subject to cyber and hacking issues.
Underwriting tools historically have and will continue to draw scrutiny of regulators and legislators. NAMIC remains vigilant in defending underwriting freedom, including the use of telematics. NAMIC does, however, stand behind the principle that telematics should be done on a voluntary basis for insurers and policyholders. NAMIC opposes efforts to create a one-size-fits-all regulatory approach to telematics because it would adversely impact market competition between insurers and create needless administrative costs and burdens that will hinder insurers in their ability to offer telematics-based driver discounts to consumers. It would also require insurers to disclose proprietary trade secrets relating to their telematics programs.
NAMIC believes that policyholders should not be required to have such devices installed on their vehicles. As innovation goes forward, NAMIC believes the insurance industry should continue to play a leadership role as it has done historically to promote safety and the protection of persons and property.
October 28, 2019 In connection with the new e-odometer rules, the National Highway Traffic Safety Administration has requested comments on the... Read more
July 18, 2017 Intelligent Mechatronic Systems, a leading connected car and insurance telematics solution provider, has been chosen by Amica Mutual Insurance Company as its partner for an on-demand insurance telematics program. Read more
June 9, 2017 Boston (June 7, 2017) – Octo Telematics, a global provider of telematics for the auto insurance industry, with 39 percent of the market in terms of active usage-based insurance policies... Read more
May 19, 2016 COLUMBUS, Ohio – SmartRide, a usage-based insurance program, gives Nationwide members personalized feedback to help them make even safer driving decisions. Nationwide's... Read more
May 5, 2015 HB 78, Telematics Agreements , which was sponsored by the commissioner of Securities and Insurance, has been signed into law by Gov. Steve Bullock. NAMIC actively opposed the legislation as being inconsistent with fundamental underwriting principles and... Read more