What is a telematics-based insurance policy and how does it work?
Telematics-based insurance policies, also known as usage-based insurance (UBI) policies, are a new type of insurance policy that uses an app to track a driver's behavior to determine their premium. By using a telematics app, insurance providers can collect data on a driver's driving habits, such as their speed, acceleration, braking, and the time of day they drive.
This data is then used to calculate a driver's insurance premium. Drivers who demonstrate safe driving habits, such as obeying speed limits and avoiding sudden stops, can receive discounts on their insurance premiums, while drivers who exhibit risky behavior, such as speeding or sudden stops, may see their premiums increase.
Telematics-based insurance policies can benefit both the insurance provider and the policyholder. Insurance providers can use the data collected to more accurately assess risk and set premiums, while policyholders can save money on their insurance premiums by demonstrating safe driving behavior.
Telematics-based insurance policies can also provide policyholders with valuable feedback on their driving habits. The app provides drivers with a score or rating based on their driving behavior, along with tips on how to improve their driving habits. This feedback can help drivers become more aware of their driving habits and improve their safety on the road.
To participate in a telematics-based insurance policy, drivers must download the telematics app provided by the insurance company. The app will then collect data on their driving behavior and send it to the insurance provider. Drivers can typically access their data and feedback through a web portal or the mobile app.
Telematics-based insurance policies are a relatively new development in the insurance industry, but they are becoming increasingly popular. Some insurance providers now in UAE, like Salama Islamic Arab Insurance offer telematics-based insurance policies, and drivers can choose from a variety of options to find the policy that best meets their needs. If you're interested in participating in a telematics-based insurance policy, contact us to learn more.