Some auto insurers already offer their customers discounts based on such information. In the future, insurers may use telematics data instead of more traditional rating variables, such as age. The voluntary use of telematics offers the opportunity to reduce premiums and promote safety through improved driving behaviors.

“Telematics devices can save lives because they tend to make people more aware of their driving tendencies, known as the halo effect,” said Christopher Sirota, CPCU, of Verisk Analytics (Nasdaq:VRSK) and its ISO business unit, a leading source of information about property and casualty insurance risk. “Truck fleet managers have already noticed the reduction of unsafe driving behaviors by 10 to 50 percent and the same results will probably apply to teenagers. One insurer saw a 30 percent reduction in claims for youthful drivers who opted in to a driving behavior program that applied a surcharge for after-midnight driving.” Insurers’ programs may differ because they will design around the information they collect.

He added that “a recent government study with volunteers using telematics connected to cameras showed that drivers took their eyes off the road for greater than two seconds preceding a crash or near-crash event. People take their eyes off the road for about four seconds while texting. At 55 mph, you’ll travel the length of a football field!”

Drivers need to learn more about the trade-offs that telematics offers on auto insurance rates. One key source of such information is an agent or broker with the letters CPCU after his or her name. That’s proof of advanced insurance education, industry experience and a commitment to a tough and enforced professional ethics code. To find a CPCU, visit www.cpcusociety.org, click “Consumers,” then click “Find an Agent/Broker.”