Gps Tracking: Revolutionizing Auto Insurance

The use of GPS tracking devices by insurance companies is an increasingly popular way to monitor driving behaviour and offer usage-based insurance programs. These devices can be plugged into a vehicle's onboard diagnostics port or downloaded as a smartphone app. They monitor various aspects of driving behaviour, such as speed, braking, steering wheel turning habits, and the time of day the vehicle is in use. This information is then used by insurance companies to tailor rates, rewarding safe driving habits with discounts and penalising poor drivers with higher rates.

While the financial benefits of using a GPS tracking device are appealing, there are also privacy concerns and potential legal risks to consider. These devices track where and when you drive, creating a detailed log of a driver's movements, which could be used in ways the driver did not initially consent to. Additionally, data collected by these devices can impact insurance claims, either supporting or refuting car accident claims.

Privacy concerns

One of the primary privacy concerns is the extent of data collection and tracking. Every time a person drives, their route may be tracked, revealing personal information such as daily routines, frequented locations, and even sensitive appointments. This data can be collected and used for purposes beyond determining insurance premiums, such as marketing or other commercial interests. There is also the possibility of insurance companies sharing or selling this data to third-party marketers or other entities, as indicated in the fine print of some companies' privacy policies. This practice further exacerbates privacy concerns, as individuals may not know who has access to their personal information and for what purposes it is being used.

Additionally, constant monitoring and data collection can be likened to a "Big Brother" scenario, where individuals feel their personal freedom is infringed upon. The data collected by these devices is detailed and extensive, including driving speed, braking habits, cornering behaviour, time of driving, distance travelled, phone usage while driving, and more. This comprehensive data collection can potentially reveal sensitive information about an individual's daily life and routines.

Furthermore, there are risks associated with data security and potential misuse. With the increasing sophistication of cyber-attacks, there is a risk of hacking, identity theft, or misuse of personal information. Not all insurance companies may have robust security measures in place, leaving users' driving data vulnerable to breaches. Additionally, data from these devices has been subpoenaed in legal cases, turning driving habits into potential evidence that could be used against individuals in court.

Another concern arises from the potential for incorrect data collection or device malfunction. If a device malfunctions or misinterprets a driving event, it could lead to unjust rate hikes or unfair assessments of driving behaviour. Over-reliance on these devices may also make drivers complacent, as they may believe that as long as the device registers safe driving, they are entirely in compliance with insurance requirements. However, there may be nuances or exceptions that the device does not account for.

Lastly, the definition of "safe driving" by insurance companies may set an unattainably high bar for drivers. The companies' discretion in defining safe driving practices and determining discount eligibility may result in very few drivers actually receiving the promised benefits.

Accident claims

For example, if a driver claims they were driving responsibly when an animal darted into their path, causing them to brake suddenly and crash, the data collected by the insurance tracker might tell a different story. The tracker may help the company determine that the driver crashed due to reckless driving or even a deliberate attempt to collect insurance money.

In the case of a hit-and-run, if the data from the tracking app shows that the driver could have contributed to the crash – for instance, by taking a corner too quickly or braking too slowly – their insurance company could assign them a higher percentage of fault to avoid paying the full amount.

In another scenario, if both drivers involved in an accident are insured by the same company and use the same tracking app, the insurance company may try to split the fault as equally as possible between the drivers to keep the settlement amounts as small as possible.

On the other hand, GPS tracking data can also be used to prove a driver's case. An attorney can access the data to find information that shows the driver was acting responsibly.

In addition, insurance companies use GPS data to investigate claims by verifying who is at fault and understanding what caused the accident, such as speeding. This helps insurance companies reduce risk by improving claim data accuracy and investigation accuracy.

Discounts for safe driving

UBI programs use telematics data about your driving habits to calculate personalised insurance premiums. This data is collected by either a physical telematics device, also known as a dongle, that is installed in your vehicle, or an app that you can download onto your smartphone. The device or app will monitor your speed, acceleration, braking, distance driven, time of day behind the wheel, phone usage while driving, and other behaviours.

Safe driving apps offered by insurance companies typically analyse movements like how your phone rotates when you enter your vehicle to determine if you're driving. They track metrics such as acceleration, braking, turning, and phone usage while driving.

Some insurance companies that offer discounts for safe driving include:

• Allstate: Up to 25% off with Drivewise
• American Family: Up to 20% off with DriveMyWay
• Farmers: Up to 35% off with Signal
• Geico: Up to 25% off with DriveEasy
• Nationwide: Up to 40% off with SmartRide
• Progressive: Customers who earn a discount with Snapshot save an average of $231 a year
• State Farm: Up to 30% off with Drive Safe & Save
• Travelers: Up to 30% off with IntelliDrive
• USAA: Up to 30% off with SafePilot

It's important to note that while these programs can lead to discounts for safe driving, some companies may raise your premiums if the results show you're not considered a safe driver. Additionally, privacy is a concern for some, as insurance companies may have access to your location data and there is a risk of them selling your information to third parties.

Vehicle maintenance

GPS tracking systems can be used to improve vehicle maintenance and reduce the likelihood of breakdowns and accidents. This is achieved through the use of advanced telematics technology, which allows for proactive maintenance scheduling tailored to each vehicle. Maintenance schedules are based on the actual usage of each vehicle, rather than following a set interval, resulting in more accurate and efficient maintenance.

GPS tracking provides real-time alerts for routine maintenance and vehicle diagnostics, such as oil changes, tire rotations, and mileage tracking. This helps to automate reporting of mileage, engine hours, driving hours, and time spent at job sites. By predicting vehicle maintenance needs, fleet managers can improve road safety and reduce costs associated with unexpected breakdowns and repairs.

In addition to routine maintenance, GPS tracking can also provide alerts for any mechanical malfunctions or issues. This allows for prompt action to be taken, further reducing the risk of accidents and costly repairs.

The use of GPS tracking for vehicle maintenance not only improves the safety of the fleet but also contributes to overall cost savings for the business. By implementing proactive maintenance practices, businesses can reduce maintenance costs and lower insurance premiums.

Overall, GPS tracking enhances the efficiency of vehicle maintenance, providing real-time data and alerts to ensure that vehicles are properly maintained and reducing the likelihood of breakdowns and accidents.

Discouraging misuse

GPS tracking devices are an effective tool to prevent commercial vehicle misuse. They can monitor when and where a vehicle is being used, so employees are discouraged from using company vehicles for personal use. Insurers appreciate the value of this monitoring in preventing misuse, which results in lower insurance costs for businesses.

GPS tracking can also help to reduce fuel costs. By measuring idle times and tracking mileage, fleet managers can save on fuel usage, reducing vehicle wear and tear and gas costs. This improved efficiency also has a positive impact on the environment, as lower fuel usage means reduced emissions.

In addition, GPS tracking devices can be used to detect unsafe driving behaviours, such as speeding, harsh cornering, excessive acceleration, and sudden braking. When drivers are aware that their driving is being monitored, they are more likely to adopt safer habits on the road, which can lead to fewer accidents and lower insurance costs.

The use of GPS tracking devices can also help to improve vehicle maintenance. By tracking vehicle diagnostics and providing real-time alerts for maintenance issues, GPS systems can help to prevent breakdowns and accidents, leading to improved road safety and reduced insurance claims.

Overall, GPS tracking devices provide a range of benefits that can help to discourage misuse, improve safety, and reduce costs for businesses and insurers.

Frequently asked questions