Telematics programs are becoming more and more common in the car insurance industry today…but what are they? “Telematics” is a fancy word for usage-based insurance. Insurance companies use in-car tracking devices to monitor drivers’ habits and tendencies. These devices track a vehicle's speed, mileage, total driving time and other factors to help determine the policyholder's car insurance premiums. Traditional insurance companies like Progressive, Allstate, GEICO and more offer some form of telematics programs. And then there are newer insurance companies that have focused on usage-based insurance like Root and Metromile.
Since telematics is relatively new to the insurance world (the first programs started about 10 years ago), there isn’t much information out there about how drivers feel about telematics compared to traditional car insurance policies. Are drivers on board with being tracked whenever they get into their car? Do they consider it worth it for a lower rate?
To understand how drivers feel about telematics insurance programs, The Zebra surveyed 1,000 U.S. drivers who either own or lease a car.
- 40% of drivers don’t know what telematics is.
- Gen Z doesn’t want to share data with insurance companies, while Millennials are more okay with it.
- 62% of drivers think that pricing insurance based on how they drive is fair.