Introduction: Vehicle and insurance telematics
It is obvious that technology has changed everything around us. For instance, it has changed the way we communicate, spend money and even drive. In this article, we will focus on the impact of technology on road safety and insurance. Technologies such as telematics have revolutionized motor insurance and road safety by providing vital information about driving behaviors. Our roads are safer and insurance products are better because of telematics. Before going into more details about the benefits and applications of telematics, let us first define what telematics is.
The word telematics refers to the process of transmitting computer based information over long distances. The word telematics can also be used to refer to the technology of storing, sending and receiving information through telecommunication devices and the effective control of remote objects. In this article’s context, telematics refers to the integrated use of informatics and telecommunications for application in automobiles i.e. controlling automobiles such as cars when they are on the move.
It is important to note that telematics isn’t limited to GPS (Global Positioning System) technologies integrated with mobile communication technology and computers in automobile navigation systems. In summary, the term telematics can be used to refer to many other vehicle systems such as; emergency warning systems, GPS navigation systems, wireless safety communication systems, driving assistance systems, fleet tracking systems, fault detection systems e.t.c. Let as now take a look at an interesting telematics concept; telematics insurance.
What is Telematics Insurance?
Telematics insurance simply refers to motor insurance based on vehicle telematics. It is important to note that vehicle telematics systems have revolutionized motor insurance by offering more accurate ways of measuring motor vehicle risks. For instance, telematics has allowed insurers to be able to measure driving parameters such as speed, concentration and accuracy among many other parameters in an effort to evaluate risk levels and charge fair premiums.
Telematics insurance simply allows insurers to measure driver risks more accurately to ensure premiums charged reflect driver experience and skills. With telematics insurance, it is possible for the insurer to tell whether a driver is careless or careful, skilled or unskilled. In the past, motor insurance companies had no way of telling whether a driver was skilled or not before issuing insurance. This lead to a lot of problems when determining premiums. It is a fact that every driver is different. Telematics insurance recognizes this and takes everything into consideration. This leads us to the benefits of telematics insurance in improving road safety.
Benefits of telematics insurance
From the above discussion, it is obvious that telematics insurance has many road safety benefits. Below are some of the main benefits of telematics insurance in regards to road safety.
GPS Navigation
1. GPS tracking/anti-theft systems have reduced car theft: Telematics insurance requires vehicles to be fitted with GPS tracking devices. This makes it easy to track stolen vehicles improving road safety. With increasing use of GPS tracking systems, car theft has reduced drastically making out roads safer.
2. Crash data reporting: The fact that telematics systems have crash data reporting capabilities makes it easy for vehicle owners and insurers to know exactly what caused an accident. This is very important in making necessary recommendations to ensure similar accidents are avoided in the future.
3. Fraud prevention: Telematics systems also assist in exposing fraud attempts thereby providing answers in case of sudden vehicle disappearance. This indirectly improves road safety by preventing ocurrneces such as vehicle tampering which is common in vehicle fraudulent cases.
4. Improved risk management in commercial fleets: The information provided by high-tech telematics systems provides insurance companies with all the necessary information to reward fleets maintaining high standards of road safety. This in turn motivates fleet managers to take all necessary road safety measures.
5. Emergency warning systems: High-tech telematics systems are usually equipped with emergency warning systems for warning drivers on things like; incoming traffic, proximity to objects, infrastructure changes e.t.c. Such warnings are very important for maintaining high road safety standards.
6. Charging premiums according to driving skills: This is another important benefit of telematics insurance in regards to road safety. As mentioned above, telematics insurance charges premiums according to driving skills. For instance, skilled drivers pays lower premiums compared to unskilled drivers. Because everyone likes to save money, drivers are forced to be more careful and skilled on the road to enjoy low premiums. This directly improves road safety.
