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Telematics

Telematics is the name for the location-based tech that allows insurers like Lemonade Car to price policies fairly, based on how much and how safely you drive.

How does Lemonade Car use telematics?

Lemonade uses location-based technology to make your car insurance better and more affordable. It allows us to price policies fairly, help you earn more discounts as you drive better, and provide vital emergency services if you need them. 

Aside from a lower premium price, there are two major upsides to driving with the Lemonade app:

  • Free roadside assistance
  • We’ll plant trees to help shrink your carbon footprint from driving (bet you didn’t see that one coming)

The location-based technology means we can help you faster when you’re stuck on the side of the road—and it also allows us to track your mileage and plant trees based on how much you drive to help get you closer to offsetting your CO2 emissions. 

Have more questions? We have plenty more answers about how telematics works for you!

What is telematics?

Telematics uses telecommunications (like phone lines, cables, and cellular networks), and informatics (like computer systems) to provide data to insurance companies. It refers to how the combo of telecommunications and information to produce telematics data. They’re part of the Internet of Things, or ‘iot,’ which is revolutionizing the insurance industry.

Telematics could be a telematics device your insurer has you install in your car (like a chip embedded in the windshield), or an app that you download. Insurers use the telematics data to track driver behavior and driver safety, and often offer discounts on insurance premiums. 

Telematics are also used in a commercial setting. Fleet managers can use telematics data with fleet management software to monitor fuel costs and fuel efficiency, driving behavior and downtime, and vehicle maintenance issues. With fleet telematics, they can monitor the entire fleet either through onboard diagnostics or the wireless network. 

What are the benefits of telematics?

Many insurance industry experts believe that fleet tracking and telematics technology leads to safer roads for everyone—both for commercial truck drivers and a parent heading to their kid’s soccer game. It’s also a way to ensure that you’re paying a fair premium based on how you actually drive.

Common Telematics Systems

There are several telematics systems available to drivers and commercial fleet companies. The automotive industry is also now partnering with telematics providers to include telematics devices in smart cars. The future of telematics is a continued push towards integration and a seamless end-user experience. At Lemonade, we’re doing our part to push this tech forward by making it as simple as possible. 

Here are a few ways that telematics come into play, both for everyday drivers and for larger commercial transportation companies. 

Vehicle tracking

Vehicle tracking using GPS tracking, through satellites and receivers, networks and cloud computing, so that companies know where their fleet vehicles are on their route. 

Maintenance improvements

Fleet telematics track hours on the road and vehicle use to schedule preventive maintenance. An electronic logging device onboard also might collect onboard diagnostics that indicate a possible maintenance issue when a commercial vehicle downloads the data at a check-in point.

Safety tracking

How often do you go ten miles an hour over the speed limit? Did you slam on your brakes at the last minute? Telematics devices report driver behavior to a fleet manager or insurance company. Some fleets even track seat belt use! 

Insurance risk assessments

Most insurance companies offer safe driving discounts, but if you agree to allow them to monitor your driver behavior you could get a bigger discount. If telematics data collected reveals that you’re a safe driver, or drive fewer miles, on safer roads, you could see your insurance premiums go down.

Should you sign up for vehicle telematics?

Insurers often offer discounts on insurance premiums to drivers who are willing to download an app or install an electronic logging device in their car. When you allow them to track your driving behavior, telematics devices prove that you’re a safe driver. 

Telematics
Please Note: These definitions don’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade. They are intended for educational purposes only - they’re not meant to be used in lieu of professional legal or financial advice. We’ll do our best to keep them updated, but they may not always reflect current industry developments. Feel free to use the terms with attribution (friends don’t let friends plagiarize!)
Insurance provided by Lemonade Insurance Company, 5 Crosby St. 3rd floor, New York, NY 10013 Lemonade Insurance Agency (LIA) is acting as the agent of Lemonade Insurance Company in selling this insurance policy, except that Lemonade Life Insurance Agency (LLIA) is acting as the agent of one or more unaffiliated companies that provide life insurance. Both LIA and LLIA receive compensation based on the premiums for the insurance policies each sells. Further information is available upon request.