The crossroads of auto insurance these days is telematics, the use of an electronic device to monitor how an automobile is being driven. The device monitors where a car is and how it is being driven, and, in theory, should help separate good drivers from bad drivers.
Here’s how many insurers use telematics these days: If a customer is interested, the insurer gives the customer a device called a “dongle,” which is hooked into the car’s computer systems. Typically, the dongle monitors when and where a car is driven along with the length of the trip. Some devices can monitor the speed of the car, use of seatbelts, engine temperature, and “acceleration events” — for example, speeding up and braking.
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