8 Ways Smartphone Telematics Could Change the World
Telematics brings a plethora of societal benefits, a point we’ve touched on before. Today, we’d like to dig a little deeper. If smartphone telematics were a superhero, what would its powers be?
1. Helping low-income drivers become more financially stable. It’s not uncommon for Americans these days to struggle to make ends meet. Pew Research Center said that the middle class is smaller than ever, while a startling 44 percent of American children come from low-income families. In this climate, it makes a big difference to find a dramatically better deal on a necessity like auto insurance. In fact, low-income families with usage based insurance are empowered to lower their rates even further, not only by improving their behavior behind the wheel, but by minimizing the miles they drive.
2. Protecting the planet. According to the nonprofit conservation organization American Forests, the average passenger vehicle produced 8,320 pounds of CO2 in 2014 – more than four tons of new greenhouse gas. Because usage based insurance bases its rates in part on mileage, policyholders have an incentive to lower that number. Drivers who bring their annual miles down from 12,000 to 10,000, for example, could eliminate almost 1,400 pounds of C02 from their yearly total. That’s real progress.
3. Decreasing traffic. When people drive fewer miles, the planet isn’t the only one to benefit. The road rage, stress and distraction of driving on congested streets brings long-term health consequences, CNN said, and as CityLab pointed out, traffic bears an impact on the economy as well. When traffic gets lighter, everyone wins.
4. Lower the costs of infrastructure. Here’s one you don’t think of every day: What does it cost to maintain the impressive infrastructure of American streets and highways? While easy to take for granted, these roads don’t maintain themselves. According to the Washington Post, the “shoddy state of the nation’s roads cost the average driver $515 in extra operation and maintenance costs on their car.” Ruts, cracks and potholes are to blame. These signs of normal wear and tear are exacerbated by use. It stands to reason that less traffic translates to longer pavement life. A recent study by the National Association of Insurance Commissioners (NAIC) would seem to agree, citing lower infrastructure costs as one of the societal benefits of usage based insurance.
5. Reducing our dependence on foreign oil. In 1973, the OPEC oil embargo made it clear that the strength of America’s economy hinges on its access to oil. In 1980, President Jimmy Carter said that protecting the flow of oil was “in the vital interest of America.” Yet at a certain point, dependence turns to liability. Green Car Reports said that with 755 cars per 1,000 people, the U.S. consumed 18 million barrels of oil daily. Any citizen might wonder how the economy would be affected if the supply were to be cut off. And no one wants to be pressured to make alliances with countries that engage in unethical behavior (such as human rights abuses) in exchange for oil. By giving drivers a personal incentive to log fewer miles, usage based insurance empowers policyholders to save money and strengthen our nation at the same time.
6. Benefiting the economy. NAIC cited a study showing that “policyholders were willing to seek out alternative transportation options or forego less valued travel altogether to lower their premiums.” When these findings were extrapolated to a national level, researchers found that an 8 percent reduction in miles traveled “would result in annual net social benefits of $50 billion to $60 billion, related mainly to reduced accidents and road congestion.”
7. Improving public health. Telematics doesn’t only incentivize less driving – it incentivizes safe driving too. As drivers focus on improving their skills, their combined effort cuts down on the number of collisions we see each year, as well as the injuries and deaths that accompany them. Policyholders who demonstrate responsible driving habits pay a lower premium for the same coverage, and those good habits help make everyone safer.
8. Increasing the number of insured drivers. Catastrophes are easier to handle when everyone’s insured. By making insurance attainable for previously under-served demographics (such as low-income and unbanked drivers), usage based insurance helps make the road a safer place.
Most people don’t tend to think of auto insurance as a hero (at least not until it saves the day). Smartphone telematics may not be able to don a cape per se, but when you look at all the good it does society? It sure deserves to. Download the Driveway Software Fact Sheet to learn more.