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Car insurance companies are increasing their use of telematics to write better insurance policies. Progressive has done it for years, but new mobile apps are making it even easier. Pretty soon insurance providers will require a driver to allow tracking. If the driver does not agree to be tracked, they will not only pay higher premiums, but they might be denied insurance from most companies. It could be like having a shady credit history, or failing to provide the basic “know-your-customer” information required to open a bank account.
Telematics-based insurance could finally gain traction... instead of requiring physical devices that must be manually installed in a car, it can now be done through mobile-phone apps that are much easier to download and install. An app is less cumbersome for the customer than climbing under the dashboard and fiddling around. It’s cheaper for the company A telematics device can cost around $100 and it may need to be retrieved and recycled to another customer if the contract ends. Finally, phones are made for communications, while in-car devices need a separate transmitter of some sort.
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