What if you could lower your car insurance rate by using a device that monitors your driving behavior? Given the latest technology with telematics devices, you can. Telematics devices help monitor your position, speed, braking behavior, and so much more. Usage-based insurance companies like Metromile use telematics devices in some states to gather accurate data to ensure you get the best rate possible.
According to the National Association of Insurance Commissioners website, “The use of telematics helps insurers more accurately estimate accident damages and reduce fraud by enabling them to analyze the driving data (such as hard braking, speed, and time) during an accident.” There are various types of telematics devices that blend the use of technology and innovation to create real-world data that benefits users. Here are five telematics devices you should know about.
1. Black box telematics device
One of the original telematics devices available is often referred to as a black box. This black box connects with your OBD-II or CAN-BUS port. The way it works is that in the black box there is a SIM card as well as a modem that all work together to communicate important info over a cellular network about your driving behavior. Black box telematics devices will have GPS, a port, SIM card, interface for the engine as well as an accelerometer. You’re able to mount your black box in your car and transmit data in an easy and effective way.
Having a black box may be able to help recover your vehicle faster in case of theft and can provide accurate tracking options for mileage-based insurance.
2. Smartphone-based telematics device
Nearly everyone these days has a smartphone, which makes data tracking easier than ever. Instead of a black box, you could use a smartphone-based telematics device that doesn’t require any installation upfront.
Using telematics devices that are mobile-first makes it easy on the driver and sends accurate data to the insurer to create rates based on the way you drive.
3. Bluetooth-powered telematics device
Aside from a black box or smartphone-based app, telematics devices can also include self-powered data transfer through Bluetooth. These types of devices can be mounted in your car on the dashboard and use Bluetooth to collect and submit information about your driving behavior to your insurer. At times you may have connectivity issues with Bluetooth — but in general, these devices send relevant information to servers which can then be used for usage-based insurance programs.
4. OBD-II Port telematics device
Another type of telematics device is one that connects to the On-Board Diagnostics II port, which is often referred to as OBD-II for short. This port makes it possible to connect to the car’s computer to help transmit important data about your driving.
Since 1996, the OBD-II port has been a requirement for all vehicles manufactured in the U.S. Telematics devices that work with the OBD-II port are effective at transmitting your data through cellular networks as part of usage-based insurance. It’s also an easy way to get started and has a low barrier with technology as you simply use the port. You can typically find the OBD-II port under the steering wheel near the dashboard.
Metromile utilizes OBD-II technology to track speed and motion and relays that information through cellular data.
5. OEM telematics device
Out of all the telematics devices there is one that is less common but is becoming more popular. It’s built into your car and is referred to as OEM, which stands for original equipment manufacturers. This telematics device uses OEM embedded hardware to transmit driver data.
Because it uses built-in car sensors, it eliminates the need for any installation. However, telematics devices like this have a lack of regularity and standards making them less popular.
As technology continues to improve, this type of telematics device which works with built-in materials will be able to help drivers get the most up-to-date data and monitor driving behavior. While it can offer precise data, it also comes at a cost to the manufacturer of the car making some of the other telematics devices more popular.
The bottom line
Telematics devices have changed the game for usage-based insurance. Using the power of technology, it’s possible to share relevant driving data to help you get better and more accurate rates if you’re a safe driver. Instead of relying on outdated models for insurance premiums, it’s possible to assess risk and your behavior using telematics devices. As you can see, they come in different forms, each with its pros and cons as it relates to accuracy, installation, and accessibility.
Melanie Lockert is a freelance writer, podcast host of the Mental Health and Wealth show, and author of Dear Debt. She’s a cat mom to two jazzy cats, Miles and Thelonious, an amateur boxer, music lover, and needs coffee to function.