The New Phase in Auto Insurance: Are We Going Usage-Based?
With innovation being at the realm of technological advancements, auto insurance companies have been experimenting with new tech releases to improve their services.
In fact, they are currently experimenting on assessing drivers based on how they drive rather than the proverbial statistics used such as age, location, and driving history.
Rather than filling out all the details before giving your driver’s license, you will now be tested by the insurance company based on how you drive a little, before they can determine a suitable quote for you. This is a fresh outlook from the previous method of generating a quote based on your driving history.
The Growth of Usage-Based Insurance
This kind of technology is known as usage-based insurance. At the forefront of this new technology are the likes of Root Insurance, which managed to raise over $100 million in funding, bringing Root’s worth near to the $1 billion valuation.
As of now, Root Insurance operates in 20 States in America, and by 2019, is looking to expand to all 50 states.
Additionally, new companies joining the auto insurance spectrum have also begun utilizing usage-based insurance, thanks to the easy access and affordability of smartphones.
In fact, companies such as Progressive Insurance, have begun offering their customers discounts based on how they drive through its ‘Snapshot’ program.
Business leader at Progressive, James Haas, stated that their company utilizes an app that looks at the driving and provides rewards and discounts that determine your safe driving.
As from an email written by Haas, he believes that when it benefits the consumer, it encourages safer driving, and provides individuals with the opportunity to get discounts for a culture of safer driving.
Taking Driving to a Technological Level
That being said, such a structure aims at gamifying the concepts of driving, so that discounts are earned over a period of time to encourage drivers to maintain the app on their phones, which requires them to have their tracking location kept on.
Moreover, according to Progressive, the information collected is then used to determine the insurance quote that the driver pays on a monthly basis.
Additionally, users of the Progressive app will also receive a first-time discount, as well as a personalized insurance premium later that will be generated based on how they drive.
Like Progressive, Root has also taken an identical approach. Once you have their app downloaded to your smartphone, you can enable the tracking location device, make an upload of the photo that is in your driver’s license, and you’re good to go.
Some of the perks of the Roots app is that you don’t have to open the app while you’re driving, sign in, or log in trips during the process.
In fact, the app will run in the background, collecting information regarding all facets of your driving skills.
Progressive vs Roots
Nevertheless, it differs from the Progressive app in the sense that it is financially stricter. It does not provide discounts based on a user’s driver history over time, or enable the user to get new renewals on their insurance quotes.
In fact, after you have completed two weeks with the app, it will generate your auto insurance premium, and the app is no longer necessary for the user.
However, there’s a catch to all this. For you to successfully build a profile with the app, you need to have the app consistently sitting in the background monitoring you.
According to chief technology officer at Root Insurance, Mr. Dan Manges, it is necessary for the app to continuously monitor the driver to build a great profile.
The Tracking Device Affair
In fact, the company mentions that it tries as hard as possible to be transparent with its clients with the app monitoring you throughout the period, without it being switched off during the two-week trial.
That being said, users can manually switch off the tracking features once the trial period is over. Nevertheless, the app will still continue to collect information which Manges says will only be used to improve their algorithm rather than change the ratings of an individual’s premiums.
Conclusively, traditional auto insurance has been around for decades, but it seems the ingenuity of technology could be replacing it pretty soon.
More inCar Insurance
The Top-In-Demand Skills You Can Learn Today With a Laptop and Internet Connection
The current workplace today is quite different from the one that your parents and forefathers experienced. As a matter of fact,...October 28, 2018
Millennials Worry About This One Specific Debt and It’s Not Student Loans
The 2015 United States Census data said found that there are actually 75.4 million millennials in the United States and according...October 28, 2018
British Motor Museum Receives a RARE Car in Donation
The iconic Ford Anglia Super may not look like much, but it was the British car that put the country on...October 28, 2018
Dating: A Booming Business with Ever-Soaring Prices!
Dating is a booming business in America. In fact, a recent study conducted by Match.com, one of the most popular dating...October 28, 2018
Playing the Jackpot? Here Are Some Common Faux Pas to Avoid in Case You Win!
Currently, there’s about $600 million in jackpot money to be claimed in tow of the largest lotteries countrywide. In fact, the...October 27, 2018
Subtle Ways to Control the Trend of Your Investment Moves and Options in a Volatile Stock Market
The unprecedented seismic shifts of the stock market can be depressing to investors, especially those that have no solid safety measures...October 27, 2018
Cheaper Car Can Save You Hundreds of Dollars Every Year in Insurance Payments
If you’re looking to purchase a new car, one of the things that you’ll have to address is the amount of...October 27, 2018
Saving That Extra Money and Being Environmentally Friendly the Hybrid Way!
Buying a car is one of the most monumental things that you’ll ever do in your adult life. For starters, not...October 27, 2018
What is Collision Car Insurance and How Does it Affect Your Car and Finances?
As the name implies, collision car insurance is a type of insurance that focuses on handling incidents whereby the policyholder has...October 27, 2018