The impact a smartphone link can have on your auto insurance premiums

State Farm is introducing a new program that includes mobile devices.

State Farm has announced that it will be using technology to help in the calculation of premiums for its auto insurance policies.

Instead of relying on traditional statistical analysis to calculate a driver’s unique rates, a mobile device installed into the vehicle will help to provide much more accurate, user based information which will help good drivers and save motorists to save a bundle on their monthly bills.

This program is being implemented in conjunction with Ford, through the automaker’s Sync platform.

By combining the Ford Sync technology with State Farm auto insurance, it means that driver behavior in the vehicle, collected by a small device, will be sent through that device’s cell phone like connection to the insurer. That way, the behaviors of safe drivers, such as driving shorter distances ever year, will be taken into consideration as their risk assessment is made and their premiums are tallied.

The impact a smartphone link can have on your auto insurance premiums

The logic behind this method is that the less you drive your car, the lower the risk that you will be in a collision or experience some kind of damage to your vehicle based on your driving behaviors. Therefore, those who drive shorter distances will not have to pay premiums that are as high as people who dramatically increase their mileage every year.

This isn’t a completely new concept. Auto insurance companies have been implementing a number of different kinds of usage based insurance coverage devices, which range in the type of information they collect and how much impact it has on the premiums. Some even go so far as to identify the speeds that are travelled, how often the driver brakes hard, jack rabbit starts, the number of left and right turns, etc., while others, like offer cheap car insurance without monitoring your actions.

The devices are installed into the vehicles of customers who would like to qualify for auto insurance discounts because they know that they don’t drive too fast or too close, so that they rarely need to slam on the brakes, or that they barely take their vehicles out of the driveway. Though many of these programs advertise that the savings is up to twenty percent, State Farm says that theirs can save up to forty.

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