This car insurance monitors your driving and sets your premium accordingly

Behavior-based insurance is likely here to stay.
Written by Greg Nichols, Contributing Writer
First person point of view of someone driving a car
R. Classen / Shutterstock

One of the nation's largest insurers is beginning the rollout of a behavior-based driving insurance product. Dubbed IntelliDrive via Connected Car, Travelers believes the new product will benefit safe drivers beginning with customers in Pennsylvania and Illinois.

But will drivers consent to having their driving behavior monitored in real-time?

IntelliDrive via Connected Car uses driving data related to factors like braking, acceleration, speed, and time of day to immediately calculate a customer's IntelliDrive score, which is then used to develop their personalized insurance premium quote. Travelers has partnered with data analytics firm LexisNexis, which will provide the driving data from cars that are enrolled in the program. 

I connected with Joe Meisinger, Vice President of Personal Insurance Product at Travelers Insurance, who told me the service will benefit conscientious drivers in a number of ways.

"With IntelliDrive via Connected Vehicles, safe driving customers can benefit from savings right away instead of waiting until renewal," Meisinger says. "Safe driving habits can lead to savings of up to 30%, while riskier driving habits may result in a higher premium, which encourages safe driving and offers savings to customers who do so. This program focuses on a more personalized rate based on users' safe driving habits."

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Travelers Insurance plans to continue expanding its telematics offerings -- the technologies used to track and transmit driving data -- into the future, leveraging advances in technology and customer insights. The reality is that this is undoubtedly the way the insurance industry will go in years ahead. Insurers have long rewarded good driving records, and with the prevalence of connected technologies, there's a huge incentive for underwriters to seek a more granular picture of individual customers' risk profiles.

For now, customers have a choice to opt in if their vehicle has embedded technology, and the year, make, and model are supported by IntelliDrive.

"IntelliDrive via Connected Vehicles makes enrolling in telematics easy," Meisinger stresses. "If a customer opts in, Travelers will simply use vehicle-level data to influence their insurance premium based on driving behaviors captured by the vehicle. If the data reflects safe driving performance, customers can be rewarded right away." 

All of this underscores the transitional moment we're in across the personal transportation paradigm. The advent of self-driving cars introduces new complexities into the picture, although Travelers believes the current insurance infrastructure is well-suited to addressing these changes.

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Meisinger adds, "As we move to greater levels of autonomy, the existing system will also help to minimize consumer confusion, regulatory uncertainty, and market disruptions. And it will ensure consistency during the period in which autonomous vehicles and driver-operated vehicles will share the road. Keep in mind that auto insurance is also the best way to protect against other issues that arise with vehicle ownership, autonomous or not, including issues related to weather damage and theft."

For the time being, savvy customers with safe driving histories probably should embrace behavior-based insurance, largely because the savings at this early stage make it a good bargain. That may not sit well with the squeamish, who fear the ramifications of tracking. 

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The reality, for better or (more likely) worse, is that we consent to a broad array of tracking and monitoring as it is, most of which come without the benefit of a discount. We may as well save a little money in the process.

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