What is a telematics or OBD II device, and what is it for?

A wide variety of telematics devices for data collection exists to support numerous connected car and telematics-based programs. Perhaps the most well-known among them is the OBD device that a driver installs in their car which will monitor in real time and record information about their driving behavior, such as speed, distance driven and instances of harsh braking.

What does a telematics device do?

By installing a telematics device provided by your insurer, you are allowing the information gathered from the device to be sent to the insurer for analysis. If the analytics data extrapolated shows that you are a safe and cautious driver, then you may be eligible for a premium discount.

Telematics devices can also describe connected car features, those of which include live weather, traffic, gps tracking and parking information.

How do I install a telematics device?

Telematics devices are plugged into your vehicle’s Onboard Diagnostic Port (OBD-II port), which is typically located under the steering wheel. All vehicles 1996 or newer have this port.

How does the telematics device work?

Once the device is installed it starts recording information about a driver’s behavior, and the information is sent to insurers over wireless phone networks.

What are the benefits of joining a telematics program?

Most telematics programs allow insurance companies to reward drivers for safe driving. Rewarded behavior includes avoiding hard braking, driving the speed limit, and less frequent late night driving – which can be more dangerous than driving in the daytime.

Being a part of a telematics program can also make drivers more aware of how they drive, curbing bad behavior. Curbing bad driving behavior can not only result in a premium reduction, but may also result in better fuel economy from having less instances of harsh braking and bursts of acceleration.

What are the various telematics technologies or device options for insurance telematics?

From black box, smartphones and OBD devices to Bluetooth®-enabled beacons (self-powered) and 12V connectors the chart below provides information which will help you best match your device agnostic program needs:

What are the most popular devices for telematics data collection and why ?

Motor insurance providers commonly select the below-mentioned devices to improve driver behavior and safety. With most data collection options insurers can accurately measure how well policyholders drive, easily integrate with claims management, increase customer retention through FNOL performance and actively manage risks and reduce loss ratio.

• Smartphone / Mobile
  A mobile app uses built-in smartphone sensors to detect driving activity. Trip data is collected and transmitted by the smartphone for analysis.Best For The Following Scenarios:
  ✓ Driver Behavior Evaluation
  ✓ Cost-Effective Regions/Markets
  ✓ Try & Buy Customer Acquisition
  ✓ Low-risk Drivers
• Bluetooth®-Enabled Self-Powered Devices
  Both Bluetooth-enabled devices are fixed-vehicle devices, paired with a smartphone app to improve trip detection by directly associating the insured vehicle with the collected trip data.Best For The Following Scenarios:
  ✓ Household Vehicle Sharing
  ✓ Low-risk Drivers
  ✓ Occasional and Seasonal Vehicles
  ✓ Pre-1996 Vehicles
  ✓ Young Drivers
• Bluetooth®-Enabled OBD
  This Bluetooth-enabled fixed plug-in device collects driving data which is then transmitted via a smartphone for analysis.
  
  Best For The Following Scenarios:
  ✓ Mileage-based Programs
  ✓ Connected Car/Value-added Services
  ✓ Driver Fraud Concerns
  ✓ High-risk Drivers
  ✓ Vehicle-centric Evaluation
• OBD
  This cellular-based fixed plug-in device collects driving data and transmits directly over cellular networks for analysis.
  
  Best For The Following Scenarios:
  ✓ Mileage-based Programs
  ✓ Connected Car/Value-added Services
  ✓ Driver Fraud Concerns
  ✓ High-risk Drivers
  ✓ Mature Drivers/Seniors
  ✓ Less Technically Sophisticated
  ✓ Vehicle-centric Evaluation
• Black Box
  The device is professionally installed in your personal vehicle or commercial vehicle and is reliable, flexible and provides ‘always-on’ data stream.
  
  Best For The Following Scenarios:
  ✓ Mileage-based Programs
  ✓ Connected Car/Value-added Services
  ✓ High-fidelity Collision Detection for Emergency Services
  ✓ Theft Detection and Stolen Vehicle Recovery
  ✓ Driver Fraud Concerns
  ✓ High-risk Drivers
  ✓ Mature Drivers/Seniors
  ✓ Less Technically Sophisticated
  ✓ Vehicle-centric Evaluation

Did you know?

Choosing the correct data collection technology can be one of the biggest challenges!

The best choice is not having to make one.

IMS’ DriveSync® connected car platform is 100% data source agnostic and it works with any data collection option. It collects, processes and analyzes driving data to provide the necessary insights and services for your program.