Telematics Enables Insurers to Monitor Driving Behavior, Promote Safety


Drivers often pay more for auto insurance due to their inexperience or past accidents. They might say that they drive more responsibly than other young drivers or that they just had bad luck in the past, but that was difficult to prove.

Now, with today’s technology, drivers can show that they drive safely. By opting in to share telematics data from their mobile phone or a device in their vehicle, they can demonstrate their driving behavior to their insurance provider.

“We were using all these other characteristics before telematics in order to try to predict who the safe drivers are; now we’re able to see based on their driving habits if they truly are safe drivers,” Justin Yoshizawa, director of product management at Mercury Insurance, told PYMNTS.

Monitoring Individual Driver Behavior 

Auto insurance prices have traditionally been determined by looking at different variables in order to predict driving behavior and the frequency of accidents. For example, it looked at the driver’s age, driving history and type of vehicle.

Beginning about 20 years ago, with the advent of telematics, a new option became available. Drivers could plug into their cars a device that would send data to the insurance company. With that, insurers could look at actual driving behavior.

More recently, another means of sharing information about driving behavior became available: mobile phones.

Utilizing Mobile Apps 

That’s the method Mercury Insurance is using for its usage-based insurance program. The MercuryGO app was launched in Texas in July 2021 and is now available in six states. The company plans to make the program available in all the states in which it writes auto insurance, except California, which does not allow usage-based insurance.

Mercury went with an app rather than a device plugged into the car for several reasons, Yoshizawa said.

First, it’s easier to implement. A device would have to be purchased, mailed to the customer and then installed. A phone, on the other hand, is something drivers already carry around with them.

Second, an app more accurately records the insured driver’s behavior. A device plugged into the car doesn’t know who’s driving. A phone, on the other hand, follows the person rather than the vehicle.

Third, an app enables the insurance company to monitor another common cause of crashes — picking up the phone while driving.

“The app on peoples’ phones allows us to track who is driving and get those characteristics,” Yoshizawa said.

Promoting Safe Driving 

In addition to helping the company determine insurance premiums, the driving skill score generated by the MercuryGO app is shared with drivers to help them improve their driving behavior.

The app also includes a family sharing program that allows members of a family to see each other’s driving scores.

“The family sharing is a big benefit to people that have teen drivers,” Yoshizawa said. “It’s a good way to see how responsible they’re being on the road.”

The MercuryGO app also enables drivers to compare their driving scores to those of other drivers in the state.

In addition to generating the score, the app offers drivers feedback on how they can improve their driving behavior. For example, it will let them know if they have been doing any of four things that are closely correlated with car crashes: speeding, hard braking, distracted driving (using the phone while driving) and road type (for example, roads that often have stop-and-go driving).

“They can look at it, get that direct feedback and help improve their score overall — which at the end of the day will lower the premium,” Yoshizawa said.