Metromile uses telematics technology to help make sure its car insurance rates are fair and affordable. Here’s everything you might want to know about car telematics and how it works.
What is Telematics?
Telematics is the technology of sending, receiving, and storing information relating to remote objects, like your car, through telecommunication devices, such as a cell phone, GPS, or our Pulse device.
When used in a car, telematics technology can count how many miles you drive and measure driving behavior. Telematics is what enables Metromile’s insurance, and without it, pay-per-mile insurance might not be possible. We can understand someone’s driving to offer accurate and affordable car insurance through telematics technology.
Telematics devices are typically comprised of:
- Input and output
- SIM card
- Engine interface
The combination of a car’s onboard diagnostic technology and location services, such as GPS, can show you a car’s location and trips it has taken. You can think of it as the internet and satellite technology that helps you understand your vehicle or where you’re going.
A brief history of telematics
Early telematics technology started with navigation systems, helping eliminate the use of maps or printed directions. Instead, drivers could use a navigation system set up in their car, which was more user-friendly.
How does telematics work?
The Metromile Pulse device uses telematics, which connects to a cellular network and nearby cell towers allowing our technology to share with our community maps of their trips, miles per gallon fuel efficiency data, vehicle location, and even street-sweeping alerts in select cities.
Telematics can help you stay connected to your vehicle in near real-time. Metromile neatly organizes data from telematics for drivers to review in the Metromile app.
Drivers can use the Metromile app to make informed decisions about their vehicle and driving, including looking for ways to save money by reviewing the miles driven and other ways to optimize their trips.
Telematic devices can monitor and inform drivers of things such as:
- Car speed
- Vehicle position
- Trip length and distance
- Hard braking
- Seat-belt usage
- Fuel usage
- Engine acceleration
This information can then be used to create a comprehensive picture of how someone uses their car, which often results in more personalized car insurance rates.
What are the benefits of telematics?
Using telematics technology can provide essential data to drivers and offer a level of transparency. Insurance companies can use telematics data to provide accurate and affordable coverage based on how you really drive, including how often you drive.
Instead of paying more when you drive less, telematics helps provide insight into risk and behavior and allows Metromile to offer drivers a reasonable rate.
Car telematics can help with:
- Driver safety
- Driver efficiency
- Reducing or better understanding risk
- Accurate and affordable pay-per-mile insurance coverage
How telematics has changed the insurance industry
Telematics insurance companies can charge a premium based on usage-based insurance or driving behavior-based models. Behavior-based, sometimes called pay-how-you-drive auto insurance, can be a good way to evaluate your risk for insurance.
Metromile was founded to create fairer and more personalized auto insurance for drivers. Our usage-based model focuses on how you actually use your car. We consider driving behavior, including how many miles you drive and the coverage selected, as some of the main factors. Other factors include the vehicle and type of insurance policy.
Car telematics can lower how much you pay for auto insurance. It allows insurance companies to identify a driver’s performance and evaluate risks in a more informed way, especially if they change over time.
Where telematics is headed
Telematics can be a gamechanger when it comes to your driving behavior, as well as for telematics insurance companies that use the data. This type of technology can democratize important information and offer transparency when it comes to driver behavior and risk.
As the technology continues to improve, telematics can offer important insights and hopefully create better driving conditions for everyone on the road.
The bottom line
Car telematics gives us the opportunity to provide affordable pay-per-mile auto insurance rates and the free smart-driving features available in the Metromile app.
You can download the Metromile app to see how telematics technology works firsthand: Ride Along™ is a free trial that will show you an accurate rate and how much you might save with pay-per-mile auto insurance.
Drivers can save 47% on average, according to a 2018 survey of new customers who saved with Metromile, and additional discounts of up to 15% off their initial quote if they demonstrate safe driving during their Ride Along™.
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.