This new auto insurance program saves motorists a mean of 22% – and makes the roads safer – Motley Idiot
Can telematics be of use to you and other road users?
Bad driving habits can increase the risk of accidents and lead to higher car insurance premiums. Insurance companies are committed to rooting out these bad habits, promoting safer behavior, and promoting more accurate pricing based on customer responsibility behind the wheel.
Telematics is the approach of many insurers. Telematics involves the use of GPS technology and onboard diagnostics to monitor driver behavior. Those who drive safely are rewarded with lower premiums.
Nationwide is one of the insurers taking advantage of the power of this technology. And a recent study by the insurer showed that more customers are open to it. In addition, both drivers who welcome it and other motorists on the road benefit.
Consumers are becoming open to telematics
According to Nationwide, nearly half of all consumers have indicated that they are interested in participating in a telematics program. This contains:
- 46% of customers said they were in a car insurance program where they would pay per mile. This type of program would benefit infrequent drivers who are less likely to collide because they don't spend as much time on the road.
- 45% of customers who said they were interested in a program that tracks their habits and rewards them with discounts for safe driving.
Motorists are increasingly accepting the surveillance technologies that would be required for these programs to operate. In fact, 45% of respondents who took Nationwide's survey said they were okay with a device that collects data about their driving habits and driving behavior, compared with just 36% who said they had no problem with that Streaming services show ads based on them tailor viewing habits.
Why are drivers so open to telematics?
Drivers may be more likely to accept telematics technology than other types of surveillance as telematics can result in significant savings in their insurance costs.
“Telematics gives customers more control over their price by including individual driving behavior in their rewards,” said Sarah Jacobs, VP of Personal Lines Product Development at Nationwide. "In fact, our average telematics customer saves 22% compared to our traditional programs!"
Insurance costs are a huge concern for many people, with 73% of consumers responding to a 2020 survey suggesting that rising auto insurance costs are a cause for concern. Many motorists who are dissatisfied with the cost of car insurance believe that they don't have to pay as much as their colleagues because they think they are personally safer behind the wheel. In fact, a whopping 66% of people believe their costs should be lower because of their good driving behavior.
Telematics is ideal for these customers as the technology gives them the opportunity to demonstrate their skills and be rewarded for it. And some evidence suggests that motorists adopting this new technology could actually help everyone.
LEARN MORE: Nationwide Car Insurance Review: Plenty of Rewards for Safe Drivers
"By rewarding safer driving with lower rewards and by providing the ability to receive ongoing driving feedback through our app, we also hope to influence a safer driving environment on the roads," said Jacobs. "We saw this in our distracted driving telematics program, which resulted in a 9% decrease in distracted driving in the first six months."
This is how you decide whether telematics makes sense
Motorists looking for a way to save on insurance should find out more about their auto insurers' telematics programs.
If you agree to forego some privacy and are confident that your driving habits will reduce your insurance costs, you have little to lose by signing up.