Monitoring the status of a vehicle can be a challenge. But thanks to technology, there are various communication devices and applications that can be used to determine the exact location of a car and its speed. This is known as vehicle telematics. The GPS in your car is an example of vehicle telematics.

Ever wondered what vehicle telematics is all about and how it can affect your insurance policy? Read on to learn more.

What is telematic system in vehicles?

Let’s start with understanding what does telematics mean in a car. In simple terms, telematics can be defined as the communication services onboard a vehicle. These communication services communicate with GPS receivers and exchange data.

In the fleet industry, fleet managers are responsible for movement of a large number of cars. Telematic integrates communications software and computer systems to obtain precise information about the location of a vehicle. The fleet managers get access to such data which allows them to manage the fleet in a more efficient fashion.

What is the utility of vehicle telematics?

Now that we know what telematics is in a car, let’s delve deeper into the various uses of a telematics system.

Companies managing a massive fleet of cars use telematics in a variety of ways. For example, they can monitor a drivers’ behaviour and ensure better safety of passengers. They can also use telematics for managing the expenses of the fleet by tracking the vehicle precisely. Telematics can also send timely alerts about any serious maintenance issues of the car. In addition, drivers can use it for planning their driving routes better and boost their productivity. Lastly, telematics plays a vital role in safeguarding fleet management companies against fraud on fuel expenses.

What is car telematics insurance policy?

Several insurance providers across the world provide a unique car insurance product where the use of the car determines the premium.

A vehicle telematics system determines the use of a vehicle and that helps the insurers to charge the appropriate premium.

Compared to a conventional car insurance policy where the premium is based on the model and manufacturing year of the car, telematics-based insurance takes the driving skills into account. Therefore, based on the data gathered by the telematics system, two people driving the same model of the car may be charged different premiums due to their driving data. In other words, telematics-based insurance offers a personalised premium as opposed to standard car insurance policies wherein individual driving habits don’t affect the premium.

Telematics-based insurance can be a great way to monitor your driving habits and help you do your bit to increase road safety. It can also help you pay a lower premium compared to that of traditional insurance policies. This is especially useful for those owners who do not drive their cars regularly. With the help of a mileage detection device, GPS, or plug-in device, the insurer can obtain all the necessary driving-related information and charge you the premium accordingly.

Although telematics vehicle insurance policy is relatively new in India, the insurance regulator is keen that insurance companies roll out these policies on a large scale. So, make sure to check with your insurer about the availability of such a car insurance policy as it can help you make substantial savings on your premium.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.