Common Myths about Telematics

In a world where it’s difficult to distinguish between fake news and real news, telematics or black-box insurance is struggling to gain confidence of car owners and fleet managers.

I have earlier discussed at length what Telematics is and what the various benefits and drawbacks of going for telematics insurance are.Today I’ll try to bust some common myths prevailing about this new age motor insurance policy.

Telematics was touted as next big thing in Insurance business and was considered to be a win-win solution for insurers and customers. A device which cuts down your insurance premium and rewards you for good driving habits!! Isn’t it the best solution for customers trying to save their hard earned money?? Well it is, but having a black box fitted into your vehicle, monitoring your driving history creeps out even the most optimistic of the lot.

Telematics Myth 1: Black-Box data will be utilised to penalise drivers who have crossed their stated mileage

The basic concept of Pay-as- you-drive insurance is to ensure that if you drive approximately up to your pre-stated mileage you will not be required to pay extra premium and if you drive more than that an extra top-up would be required to be paid. But if your telematics reads more mileage then you can always get it amended. Telematics is especially rewarding for customers who like to use their secondary vehicle for few getaways each year.

Telematics Myth 2: Insurers may randomly charge customers who drive rash or over speed

A good driving pattern over a period of time can be rewarding under this scheme but over speeding occasionally or hard braking won’t affect your premium. Telematics is there to reward good behaviour and not to penalise randomly.

Telematics Myth 3: It will be used as surveillance device to track customer’s location

I know this is the biggest concern for every customer thinking of getting a black box fit in their vehicles, but unlike the common perception insurers don’t want to track where you are travelling. They want to understand how you drive so that they can offer you the best possible discounts of motor premium quotes.

Telematics Myth 4: It will relay the data to police in case over speeding is observed

Yes this is another of the concerns but in reality nothing of this sort is done nor is the telematics device configured to relay such signals. Telematics data can be used by law enforcing agencies only in case of serious incident or an official enquiry is made.

Telematics Myth 5: Telematics device will mess with your car machinery and will affect your car’s warranty

The device doesn’t mess with internal machinery of your vehicle, in-fact it is plugged-into your vehicle’s diagnostic port. Car’s warranty is also not affected by installing this device.

I hope I have been able to address the misconceptions about the blackbox insurance. Read More about 10 Factors That Affect Your Car Insurance Premium

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