Electronic monitoring systems have become prevalent in the auto insurance industry. Today, almost every major insurance company offers some type of electronic monitoring system that can be installed in your vehicle. In short, electronic monitoring systems can and do save you money because most auto insurance companies will provide you with a discount on your monthly rate if you have one installed in your car. Although it can save you money, there are some other issues to consider before deciding to have one installed in your vehicle.
What Is an Electronic Monitoring System?
An electronic monitoring system is basically a small electronic device that connects with your car's diagnostic system. It will record information about your driving habits. Your car's diagnostic system is akin to your body's nervous system, since it controls almost everything that your car does. The device will use it to record everything, including how fast you drive, where and when you go, and how often you hit the brakes. Insurance companies want to have this information available because it allows them to provide more accurate insurance rates because they have a more specific profile of how you actually behave on the road. They tend to favor drivers that travel smaller distances, use less mileage, and travel during daytime hours. They also pay attention to how fast you drive and whether you actually observe the local speed limits because that is a key risk indicator.
The Benefits of Using an Electronic Monitoring System
The primary benefit of using an electronic monitoring system is that you will receive a lower monthly rate. The exact amount that you will save depends on the insurance company, but on average, drivers save about $100 to $300 per year. Insurance companies believe that having the information provided by these systems will allow them to lower insurance rates across the board and also keep drivers safer because they will be more aware of their driving habits. They believe that people will drive safer because they know that they are being monitored, which could help prevent accidents and traffic violations from occurring.
Despite the potentially positive benefits of these devices, there are some serious privacy considerations associated with them. As of now, most insurance companies are offering them to drivers on a voluntary basis, but there is concern that they may eventually become required for all drivers. Another concern is that they may actually record more information than people think, since it is possible to record what is being said in the car, as well as what people are actually doing. Insurance companies deny this, but some privacy advocates believe that it is a possibility. Finally, there is also concern about who will have access to the information, whether it is law enforcement or even private companies.
An electronic monitoring system has the ability to save you money, but it does require you to fully consider the ramifications of enrolling in this program. Some people have already signed up for these programs due to the savings, while others have declined due to privacy concerns. Consider all sides of the issue in order to make the right choice for your auto insurance policy.
For more information on how electronic monitoring systems can save on your Dallas auto insurance, give us a call at (817) 589-0006.