Talking Telematics

We want you to save money on your car insurance, and telematics helps us do that! 

But you might be scratching your head wondering—what the hell is telematics, and how does it all work? How does the technology integrate with a device I plug into my car? And how will all of this affect what I pay for car insurance? 

We break down all of this in more detail below.

TL;DR

• Lemonade Car was built on 3 billion miles of driving data, and was designed to give our drivers the best coverage and a seamless experience.
• When you buy a Lemonade Car policy, we’ll send you a telematics device to install in your car, which lets us track your mileage down to a single foot.
• Your monthly price is based on how many miles you actually drive, so your device needs to be plugged in all the time.
• Keeping your telematics device plugged into your car can have other added benefits—like helping us locate your car if it’s stolen, and potentially lowering your premium at renewals for safe driving habits.

What is telematics?

Telematics might sound like an ‘80s pop band, but it’s actually a word used to describe how insurance companies cull data from telecommunications (phone lines, cables, cellular networks) and what are called informatics (like computers and IT systems). 

They’re part of the Internet of Things that is—insert your best Morgan Freeman voiceover here—revolutionizing the insurance industry. FYI, if you drop the phrase ‘Internet of Things’ into casual conversation, you’re guaranteed to seem 5x smarter than usual.

Insurers use the telematics data to track things like mileage and driver behavior, and often offer policyholders discounts and savings based on safe, low-mileage driving. 

How does a telematics device work?

Telematics programs like pay per mile insurance, pay-as-you-go insurance, and usage-based insurance programs (UBI)—which are all based on the same basic idea—often require you to drive with a telematics device to capture your exact mileage. 

The device is like a mini portable computer—similar in shape and size to a USB—and it plugs into your car’s on-board diagnostics port (aka OBD-II port). It includes functions like GPS, an accelerometer sensor, and cellular signal to retrieve driving data from your car. 

Telematics technology in the device can track the number of miles you drive with precision, detect certain driving behavior—like the hard braking, and cornering—as well as diagnostics about your car’s health.      

Why do I need to use a telematics device when I drive with Lemonade Car?

At Lemonade Car, the way you drive matters. Our plug-in device gives you the power to lower your insurance costs based on your mileage and other driving habits. Learn more about how Lemonade Car’s dynamic, mileage-based pricing works—and how it’s an ideal program for safe, low-mileage drivers—here.

How do I install the device in my car?

When you buy your first Lemonade Car policy, we send you a telematics device in the mail. All you have to do is plug it into your car’s OBD-II port, and get it set up using our mobile app. If you cover more than one car on your policy, we’ll send you a device for each vehicle. 

Wondering how to find your car’s OBD-II port? Check out our simple guide to get your car connected here. (FYI, nearly every car made after 1996 should have one of these ports.) 

If your car doesn’t have an OBD-II port, we send an adapter cable along with your device so you can connect it via your car’s 12V power port—the spot where a car’s cigarette lighter might go. 

What are other benefits of driving with Lemonade Car’s plug-in device?

Driving with Lemonade Car’s telematics device gets you a ton of other perks, including:

• We can help retrieve your car if it gets stolen.
• We can measure good driving habits—like opting for well-maintained roads, and driving during daylight hours or avoiding heavy traffic—which could potentially lead to lower insurance rates at renewals for safe drivers. (That also means that dangerous driving behaviors—like hard braking, or speeding—could negatively impact your premium.)  

Will a telematics device wear down my car’s battery?

Contrary to popular belief, the device shouldn’t drain your car’s battery, unless your car is left in park for multiple weeks (or months!) on end. The device’s internal battery recharges when your car is running, and sits in low power mode when it isn’t.  

Do I need to drive with the device plugged in?

Neglecting telematics is a bit like ordering a BLT and then asking to hold the bacon and tomato—you’d be losing what really makes Lemonade Car awesome. (No offense to lettuce.)

Lemonade Car uses tech to give you the best real-time services, including fair pricing and savings for safe driving habits. If you don’t keep the device plugged into your car, we won’t be able to provide you with the services and coverage that Lemonade Car was designed to offer. 

You’ll also end up paying more, because we won’t be able to track your mileage with precision, and we won’t be able to help locate your car if it’s stolen.

And just a quick disclaimer: If you leave your device unplugged, or without signal, you may get charged a penalty fee.

What happens if I don’t want to drive with the plug-in device?

If you don’t want to use the device, then Lemonade Car might not be right for you. No hard feelings, we can still be friends who insure your home and pets!

Lemonade Car was designed to give our drivers the power to help determine their price each month through their mileage, all with telematics in mind. It’s the heart of the product, and something we’re pretty proud of.

Without the telematics device, pay per mile car insurance would simply not be possible. 

In conclusion…

Technology can be a friend or foe. Some of the ways it’s used—Kia Boyz, we’re looking at you—are pretty questionable. But we’re genuinely excited about how Lemonade Car and its plug-in device can help keep your insurance costs down.

If you’re thinking “yeah, yeah, every company says they only care about the customer,” keep in mind that our unique business model turns insurance into a social and environmental good, like our Giveback and tree planting programs. 

Ready to roll with Lemonade Car? Click below to get started.

A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them.represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.