Telematics
In-vehicle or phone technology that records how a car is driven. Usage-based auto insurance prices from it, which turns driving data into a rating input.
Telematics is the technology that watches a vehicle while it is being driven. The NAIC describes it as technology available in a vehicle either through a self-installed plug-in device or already built in by the manufacturer, and increasingly through a phone app. Usage-based insurance is the product built on top of it: auto coverage that tracks mileage and driving behavior so that, in the NAIC’s phrasing, a driver’s behavior is monitored directly while the person drives.
What is actually collected is more specific than “how you drive.” The NAIC lists miles driven, time of day, where the vehicle is driven by GPS, rapid acceleration, hard braking, hard cornering, and air bag deployment. Each of those is a variable that can end up in a score, and a score that moves a premium is a rating variable whatever the marketing calls it. That is also why telematics appears by name in the data inventory a regulator asks for: it is one of the listed data elements in Exhibit D of the NAIC AI Systems Evaluation Tool, alongside aerial imagery, geocoding, and biometric information.
Two live regulatory threads sit on top of it. One is privacy: tracking mileage and behavior has drawn enough concern that some states now require disclosure of tracking practices and devices, and legislatures have gone further on retention, resale, and what the data may be combined with. The other is proxy risk. Driving exposure is not evenly distributed, so a behavior score can pick up where and when someone has to drive rather than how carefully they do it. Our coverage of a California telematics bill follows one attempt to legislate both at once, and the Exhibit D checklist covers what a carrier needs on file for the feed itself.