Auto Insurance And Mileage: The Tracking Technology Twist

How much you drive is a significant factor in determining your auto insurance rates. Insurers have several ways of tracking your mileage, which can be used to adjust your premium or offer a discount. This can be done through self-reporting, where the insurer may call the policyholder to ask for a current odometer reading. However, this method relies on the honesty of the driver and may not always be accurate. Another way is through technology, where a tracking device is installed in the car or a smartphone app is used to monitor speed, acceleration, braking, and other details. Additionally, some insurers access state or national databases to confirm vehicle mileage. While this method may not reflect individual mileage accurately, it provides a broad set of data. Ultimately, the more you drive, the higher your insurance rates are likely to be, as it increases the chance of being involved in an accident.

Self-reporting

In the case of Nathaniel Epting, who saw his insurance bill increase by almost a third, his insurance company determined his mileage by collecting data from his car when it was in the shop. Repair shops record mileage when you take your car in for an oil change or a repair after an accident. This information is then passed on to the insurance company.

Consumer Watchdog's Carmen Balber says that policyholders must be asked about their mileage, but only once every three years. In the meantime, insurance companies can use other sources of information, such as DMV records of smog checks, which also record mileage.

It is important to keep your insurer updated with your current mileage. If they think you're driving more miles than you actually are, you might miss out on lower rates. Some insurers offer discounts to drivers who log a lower-than-average number of miles per year. Keeping your mileage updated ensures you can still qualify for these discounts.

If you drive fewer miles per year, you pose less of a risk to your insurer and will therefore pay less. Ask for a low-mileage discount and adjust your annual mileage with your insurer if your circumstances have changed and you're driving less.

Tracking devices

There are two main types of auto insurance tracking devices: physical telematics devices and smartphone apps. Physical telematics devices, also known as dongles, are installed in the vehicle, typically plugged into the onboard diagnostic (OBD-II) port, which is commonly found beneath the steering wheel. This type of device relies on the car's onboard diagnostic system and sensors to track key performance indicators like fuel and oil levels, mileage, and tire pressure.

On the other hand, smartphone apps use sensors to gather data on driving behaviour. While they don't have direct access to the OBD-II port, they can still detect behaviours like sudden acceleration and hard braking. Both types of tracking devices send encrypted data to the insurer, who uses it to evaluate driving habits and determine rates and discounts.

Some insurance companies offer usage-based insurance (UBI) programs that utilize these tracking devices. UBI programs use telematics data to calculate personalized insurance premiums based on driving habits. This can be beneficial for motorists who don't drive often or who are considered safe drivers, as it allows for pay-per-mile rates or discounted premiums. Examples of UBI programs include Progressive's Snapshot, Allstate's Drivewise, Geico's DriveEasy, and State Farm's Drive Safe & Save.

In addition to mileage and driving behaviour, insurance companies may also track vehicle location through GPS data. This can be useful in recovering stolen vehicles, as seen in the case of Samantha Sannella, whose Jeep was recovered with the help of a tracking system. However, it is important to note that allowing an insurance company to track your vehicle's data and location comes at the cost of privacy, and there is a risk of the company selling this information to third parties.

Smartphone apps

The usage of smartphone apps for tracking mileage and driving behaviour is often part of a usage-based insurance (UBI) program, also known as black box car insurance. These programs use telematics data to calculate personalised insurance premiums, offering discounts or lower rates for safe drivers or those who drive fewer miles. Examples of such programs include Progressive's Snapshot, Allstate's Drivewise, and DriveSafe & Save by State Farm.

While these apps can help drivers save money on their insurance premiums, there are privacy concerns associated with allowing an insurance company to track driving data and location. Additionally, drivers who engage in risky driving behaviours or have long commutes may find that their insurance costs increase as a result of the data collected by these apps.

It is worth noting that auto insurance companies may also collect mileage data through other methods, such as self-reporting, databases, or repair shop records, which can be used to verify the accuracy of the data provided by drivers.

Repair shops

While insurance companies may recommend or even pressure you to use a specific repair shop, you are not required to do so. It is in the insurance company's best interest to direct you to a shop within their network, as this will be cheaper and more convenient for them. However, this may not be the best option for you. Using an in-network repair shop may result in faster repairs, but it could also mean that not all issues with your vehicle are identified and addressed. Additionally, the shop may prioritise cost-effectiveness over quality.

If you choose to use a different repair shop, be prepared for some pushback from your insurance company. They may claim that repairs will take longer or that they cannot guarantee the repairs or warranties. However, you have the right to choose where to take your vehicle, and they are still required to reimburse you, even if you do not use their recommended shop.

To choose the right repair shop, consider getting recommendations from people you trust, reading consumer reviews, and checking for cleanliness and modern equipment. Ultimately, follow your instincts and go with a repair shop that you trust.

Databases

Auto insurance companies use databases to determine a driver's mileage. These databases are often state or national databases that contain vehicle mileage information. However, the data obtained from these databases may not always be accurate or reflective of an individual driver's mileage. For example, mileage data may be gathered from state inspection providers, maintenance records, repair shops, or car dealers, who may make errors when entering mileage information.

In addition to databases, auto insurance companies employ other methods to collect mileage data. One common method is self-reporting, where a driver may be contacted by their insurer and asked to provide a current odometer reading. While this method is simple, it relies on the honesty and accuracy of the driver's self-reported information.

Another approach is the use of technology, such as tracking devices or smartphone apps. These tools can be used to monitor and record a vehicle's mileage, as well as other driving habits like speed, acceleration, and braking patterns. This data is then transmitted to the insurance company, allowing them to set rates that reflect the driver's level of risk.

The amount of mileage a person drives is an important factor in determining their insurance premium. Individuals who drive more miles are generally considered to have a higher risk of being involved in an accident, and thus may be charged higher premiums. By collecting accurate mileage data, insurance companies can set rates that reflect the driver's risk profile more accurately.

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