Using Technology to Lower Your Auto Insurance RatesBy Floyd Arthur

Many insurance companies across the United States are

offering customers an

interesting deal: Lower your auto insurance rates by

allowing your insurer to install a

tracking device in your car. Using the science of telematics,

which combines wireless

technologies with sophisticated computer algorithms, the

devices monitor mileage and

driver behaviors, such as the times of day a person drives, his speed,

and how often he

slams on the brakes. For drivers who meet certain

criteria, the device can mean

significantly lower

auto insurance rates.

Auto Insurance Rates

An array of tracking devices are being offered by various insurers.

Progressive’s gadget,

called Snapshot, tracks mileage, driving times and braking

behavior. The device costs

the company about $100, but Progressive provides it to drivers

free of charge. According

to Progressive, about 70 percent of customers who

use it qualify for some kind of

discount--typically about $150 per year. The company says that

it will not use the data it

obtains to increase a customer’s rates.

Allstate offers a more sophisticated device, which tracks not only

mileage and driving

times but also detects when the car exceeds 80 miles per hour, while State Farm goes

one step further and uses GPS to track where the car is garaged.

Newer devices use a

smartphone app to do the tracking without installing

anything at all. In the United

Kingdom, where about 20 percent of all auto insurance

policies are telematics-based, an

app called Marmalade is already available for families with teens

who are learning to drive.

Sacrificing Privacy for Lower

Auto Insurance Rates?

According to the insurance industry, customers who install tracking devices in their cars

have nothing to lose and everything to gain. In fact, they claim, installing a device gives

a driver with limited experience or a less-than-perfect driving record a

way to prove to

his insurer that his driving habits are sound. As smartphone

applications become the norm,

instant feedback may also help drivers with bad habits to correct

risky behaviors as they occur.

Nevertheless, digital privacy advocates say the tracking

technology has the to potential

to intrude on individual privacy in as yet unknown ways, such as listening to

conversations and monitoring where a driver goes. Further,

they say, there is no

guarantee that the insurance industry will not use the

information it gathers to increase

rather than decrease

a driver’s rates.

Nor are the majority of U.S.consumers excited about

telematics-based insurance--at

least not yet. According to a 2014 survey of a representative

sample of 2,200 U.S. drivers

conducted by Deloitte, about 50 percent of Americans are not interested in trying such a

device. Of those who said they would consider it, only about 25 percent said they would do so

unequivocally. The other 25 percent said it would depend on the size of

the discount they received.

Is Telematics-Based Insurance the Wave of the

Future?

According to a number of insurance industry experts,

telematics-based insurance is here

to stay. In fact, says Deloitte, consumers who choose to

opt-out of such programs may

one day find themselves assigned to a “special risk” category of

drivers who pay higher

premiums simply because they do not allow themselves to be tracked. “The genie is out

of the bottle,” the consulting firm said in its report. “The industry as

a whole is not likely

to go back to relying only on its traditional methods of

assessing auto risks.”

Whether you are thinking about telematics-based insurance or are

satisfied with the

status-quo, it’s always a good time to shop for lower auto

insurance rates. Our

experienced agents are available to help you select the coverage

you need at a price point

that’s right for you. Just call our office at 516-292-2780

any weekday between 9 a.m.

and 6 p.m. to schedule an

appointment, or request a free consultation online

Visit www.CarmoonGroup.com and get a FREE 30-Minute

Consultation today!