You’ve probably heard that insurance companies are offering trackers
to either lower your policy costs, or offer a discount for good behavior. This might indeed present a series of benefits, but there are some cons to consider before accepting an auto insurance tracking device in your car.
Weigh the pros and cons before getting an auto insurance tracking device. It could mean a good amount of savings plus an added security feature for you and your family; or it could mean more premium but with added benefits. Just keep in mind that some insurance companies may disclose the data they track, so make sure you not only read the fine print, but also specifically request a list of items that will be stored.
- Lower premiums: This is the primary benefit to the consumer and the most common reason why people choose to install them. By linking insurance premiums to your actual driving habits, an insurance company can be more precise with the premium it charges you. Thus, if you are a good driver, you’ll likely pay a lower premium than what you would without it.
- Estimation of damages: Data collection from your vehicle allows insurance companies to more accurately recreate accidents and estimate the compensation you are owed in the event that your vehicle is damaged in an accident.
- Security: If your telematics device tracks your vehicle’s location, it will be much easier for the police to find and can thereby lower accident and theft related insurance costs.
- Privacy: The most frequently cited drawback of telematics devices is that you give up a little bit of your privacy when you use them. Each insurance company can program a device to track different things, but the most invasive metrics insurance companies track is your location. Many are simply not comfortable with their insurance company having this information.
- Raw data is not a good indicator of driver safety: You may think you are a safe driver, but insurance companies have their own definition of what they consider to be “safe.” For example, most insurance companies consider extreme braking events to be examples of dangerous driving. But let’s say you live in a crowded urban environment and you frequently slam your brakes to avoid pedestrians darting into streets or cars in front of you suddenly stopping. A telematics device is incapable of distinguishing between good extreme braking and bad extreme braking, and your insurance company could raise your rates on the basis of this information.
- The discount might not be that great: A 2016 Pew survey found that many drivers who use telematics devices actually never receive their promised discounts at all or receive a mush smaller discount than they were promised