The New York State Department of Financial Services (DFS) is inviting insurance companies to adopt a new type of program for assigning premium costs known as a UBI (Usage-Based Insurance) program.
This program, called Telematics, measure key factors about driving habits. These key factors include driving patterns, braking and acceleration patterns, propensities for distracted driving, times of day drivers operate their vehicles, number of miles driven, and other key pieces of data that impact drivers’ insurance rates.
UBI Benefits to Insurers
Insurers are able to see, at a glance, the drivers that are higher or lower risks based on location, time of day, and driving habits. The benefits, though, go even further. Drivers on the road are more likely to drive more defensively when they know they are being observed.
Telematics Benefits to New York
The goal, for the state of New York, is to see a reduction in insurance rates for its citizens who prove to drive safely – initially. Over time, however, New York State hopes to reap the rewards of fewer auto accidents as well as a growing number of citizens celebrating lower insurance premiums as they develop safer driving habits.
Potential Benefits to Parents
Perhaps one of the biggest benefits is that one insurer has already created an app that, once installed on phones of teen drivers, disable programs like email and text messaging, even making phone calls while driving. This same device also records speeding, reckless driving, and other dangerous or suspect activities parents need to know about.
There are many people who remain increasingly concerned about telematics and what it represents for privacy. The state of New York does encourage insurance companies to offer telematics program, but only in a voluntary capacity. The state of New York understands these concerns and has only approved UBI programs that are completely voluntary to consumers.
Programs vary greatly from one provider to another. Some providers require drivers to install the telematics device for a specific period of time in order to establish a driving record, while others require the telematics device to remain installed for the duration in order to maintain potentially discounted insurance rates.
Many in the insurance industry view this move by the New York DFS to be an innovative move that is sure to drive new products to the market and attract new businesses to the state despite the concerns some people have about privacy.
Looking for Other Ways to Save On Your Auto Insurance?
Not sure if you are ready to install telematics in your vehicle, here is another clever way to save on your auto insurance. New York State law requires all insurance companies to offer a minimum of 10% discount in the base rate of your auto or motorcycle liability and collision coverage over 3 years upon completion of a New York DMV – approved Defensive Driving Course.