Telematics

What Does Telematics Mean?

Telematics is a field of technology that involves devices installed in vehicles to use wireless technology for monitoring various conditions, such as location and driving speed. The term “telematics” is derived from combining “telecommunications” and “informatics.”

Some insurance companies now utilize telematics to offer usage-based auto insurance.

Insuranceopedia Explains Telematics

Telematics involves installing a black box in a vehicle, typically in a location that is safest from potential crashes, such as the rear of the car. This device monitors the vehicle’s activities and wirelessly transmits the data for storage. It can detect whether the vehicle is idle, in motion, or involved in an accident.

Fleet management companies can leverage this technology to monitor and optimize their operations effectively.

Insurance companies also use telematics to offer auto insurance policies priced based on individual driving behavior, rather than relying solely on the driver’s risk class or driving history.