• Alex Carter

What is Usage Based Insurance | Pay As You Drive Insurance

Updated: Dec 5, 2019

Telematics insurance or Usage based insurance in simple words is an insurance scheme or an offering by insurance companies in which a telematics box or GPS tracking device is fitted to your vehicle with which they are able to track the vehicle and record driver behavior ultimately scoring the drivers based on the same.

Telematics insurance or Usage based insurance in simple words is an insurance scheme or an offering by insurance companies in which a telematics box or GPS tracking device is fitted to your vehicle with which they are able to track the vehicle and record driver behavior ultimately scoring the drivers based on the same. Now once the insurance companies have this data, they simply fine tune their insurance premium, the better and least risky drivers get lower premium payouts and vice versa.


Learn more about the 5 latest transportation & fleet management trends.


The telematics box (also commonly known as a black box) measures various aspects of how, when and where you drive.


Usually a telematics box contains

- SIM Card

- GPS module for locating the vehicle

- GSM module for sending data

- Motion or G Force Sensors

- Wireless communication (being introduced recently like bluetooth and wifi)

- And a computer software hosting algorithms, data and to perform number crunching and analytics to which the data is sent.


Discover more about how a vehicle tracking device works.


How Telematics Insurance or Usage Based Insurance Help :


Insurers

  • Increase loyalty of current policy holders & attract new customers

  • Generate revenue via value-added services

  • Lower risk, cost and claims


Drivers

  • Pay for the kind of driving you actually do.

  • Instant feed back on your driving habits

  • Lower risk, cost and claims


Automotive Manufacturers

  • Increase loyalty of current policy holders & attract new customers

  • Generate revenue via value-added services

  • Lower risk, cost and claims

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