How Smartphone Telematics Are Helping Insurance Companies and Motorists



Car insurance is something that is essential for those taking a vehicle on the road. However, this type of cover can be very expensive and can end up costing a huge amount in monthly premiums depending on the type of vehicle you have among other things. As a result, many have looked for alternatives over recent years, one of which is UBI, or user-based insurance.

Over the past few years, this type of cover has become increasingly popular amongst certain drivers, as it can help to make a big difference to costs. More and more insurance companies have started offering UBI, which is method by which insurance coverage providers can assess the behavior of motorists when they are behind the wheel. For those who display sensible, safe driving, the cost of insurance can be slashed as a result.

How UBI Works

So, how does UBI work and how do insurance providers know what the behavior of their individual clients are when they are on the road? Well, traditionally, this has been done through the installation of a special device into the driver’s vehicle, which then allows the insurance company to get a much better idea about the customer’s driving. The device is a wireless one with more and more motorists opting to have them fitted so they can move to UBI and save money.



However, more recently, there has been a change in the way that insurance companies are monitoring driver behavior, with many deciding to turn to modern smart technology in order to get the information they need. Smartphone telematics is set to revolutionize UBI, even though the concept of UBI is still something of a revolution itself in the world of auto insurance.

Why Is the Change Taking Place?

UBI is still a relatively young concept in the world of insurance but both insurance companies and customers are benefitting from it. However, one of the key issues for insurance companies is that installing the necessary technological devices into drivers’ cars is proving to be quite costly. This is because of the cost of manufacturing the necessary hardware among other things.

So, many insurance companies have now decided to look at harnessing smart technology through the motorists’ own smartphones, which will cut costs for them and will also make life easier for motorists who will not have to have a special device installed in the vehicle. In addition, insurance companies will not have to worry about the cost if manufacturing the wireless devices that are currently used by many in order to provide access to UBI for their customers.

Most motorists these days have a smartphone, and with our move into the digital era, many are savvy about using specialist apps and services on their phones. Therefore, having a system whereby sensors are built into their smartphones will not prove to be a problem for most. It means that they can continue enjoying access to more affordable insurance cover and smartphones are playing an important role in providing this access.

For the insurance companies, the benefits of this system are clear. The insurers will still be able to obtain accurate data with regard to the safety and behavior of the motorist while on the road. However, they can save themselves a lot of time and money by cutting out the need for hardware because they will not longer need to use the wireless devices many are currently using.

Beneficial for Insurance Companies and Clients

Another thing to keep in mind is that this shift in technology used for UBI is something that both insurance companies and their customers will benefit from financially. As mentioned above, for insurance companies, the savings will come from not having to pay for wireless hardware to be manufactured for their UBI customers. This then has an impact on the amount they spend on operating the business, enabling them to increase their bottom line.

As a result of this, insurance companies can then afford to pass some of these savings on to customers, and this will be through a reduction in insurance premiums. Many drivers are on a tight budget and any reduction in insurance costs will no doubt be welcomed. With insurance providers being able to reduce their own costs by using smart technology to monitor driver behavior, there is a far better chance of customers benefitting from reductions in their insurance costs.

A Great Move for All Concerned

As research and development of this technology continues, it is clear that using sensors on smartphones rather than wireless hardware is something that will benefit all concerned. For safe drivers who are sensible and considerate when behind the wheel, it provides a great way for them to demonstrate this to their insurance company. In addition, it provides them with a simply solution to do this.