How Telematics Continues to Transform the Auto Market

• May 8, 2026

By Ava Black

The auto insurance industry has been undergoing a transformation as connected vehicles, driver assistance systems and telematics reshape how insurers assess risk and manage claims. For years, insurers set premiums and measured risk using broad demographic data and driving records. However, with the emergence of telematics, insurers now have access to real-time data on driving habits and vehicle performance, allowing for clearer, more accurate risk assessments.

The technology captures data on factors such as speed, acceleration, braking and mileage, allowing insurers to analyze individual trips rather than relying on generalized driving patterns, entering a personalized era of auto insurance.

In response to these technologies, insurers are increasingly adopting usage-based insurance (UBI), which focuses on how much and when a driver uses their vehicle, and behavior-based insurance (BBI) models, which evaluate how safely the driver operates it.

Studies show that the technology has an impact. Drivers with UBI reduced speeding, hard braking and rapid acceleration by between 11%–25%, according to a 2026 scientific journal published by Elsevier.

Technology providers and operators are further accelerating telematics adoption in commercial auto insurance, too. Fleet operators can use telematics data to identify drivers who may need additional training or corrective action before those patterns negatively affect underwriting, pricing, or retention.

As more insurers use driving data to determine pricing and renewals, agents become essential advocates for clients who encounter unexpected premium changes or eligibility decisions. Unlike traditional auto insurance, telematics require ongoing attention, as participants must ensure approved data-collection methods remain active and any carrier-specific setup requirements are met.

Over time, apps may be accidentally deleted or settings changed, which can interrupt data sharing and put discounts at risk. Agents add value by monitoring client participation, comparing telematics programs, and helping clients understand differences in data collection, scoring and pricing.

Using telematics in insurance and risk management presents other challenges. Insurers are tasked with managing large volumes of data, addressing device and sensor reliability issues and ensuring underwriting and claims staff are properly trained. These challenges are particularly significant in commercial insurance, where failure to respond to known risky behavior may increase employer liability.

Privacy and data security are also key concerns given the collection of location-based and behavioral driving data. These concerns have prompted legislative action in several U.S. states to strengthen consumer protections.

Lawmakers in Virginia, Maryland, New York and North Carolina have introduced bills that place limits on how insurers collect and use telematics data. Moving forward, transparency regarding data protection practices will remain a key factor in the adoption of telematics-driven insurance policies.

Despite challenges, the use of telematics is growing, with the global insurance telematics market valued at $4.85 billion in 2024 and projected to exceed $18 billion by the early 2030s, according to SNS Insider.

As vehicles become more connected and telematics platforms improve, insurers will use real-time data to guide underwriting, pricing and claims handling. For insurance professionals, understanding these technologies is increasingly essential. This evolution is more than technological; it is a new way of thinking about how auto insurance manages risk.

Ava Blank is a content marketing coordinator at Ansay & Associates, focusing on insurance-related content and communications.

The information is provided solely for informational and educational purposes and is intended as general guidance only. This material does not constitute legal advice, insurance advice, or risk management advice, and it should not be relied upon as such. No representation or warranty is made regarding the completeness, accuracy, or applicability of the information to any particular circumstance. Recipients should consult with a licensed insurance professional or other qualified advisor to obtain advice tailored to their specific insurance coverage and risk management needs.