Why Insurance Companies Need to Structure Their Policies Based on the ‘SMART’ Revolution
It’s high time car owners and insurance companies rethink the whole structure behind car insurance. With the advent of smart features and the birth of AI in the automotive industry, cars will slowly transition from being a utility to providing a service. The impact of such a fundamental transformation is bound to be felt far and wide, with the insurance sector being the one most affected.
As a matter of fact, machine learning is currently making leaps and bounds in the car insurance sector, leading to the most recent, albeit not so well-outlined division between future and traditional insurers. Additionally, there has been the birth of the insurtech players. They are currently providing a myriad of possibilities for drivers to benefit from data-intensive structures.
For decades, car insurance has been a lucrative venture for many insurance companies. Firstly, the law has made it mandatory that all cars on the road need to have an insurance cover. Moreover, in some countries, drivers are required to have a policy whereby any secondary car they own, whether they are driving it or not, is required to have insurance; regardless of whether they are in the parking lot 90% of the time.
Metromile
In response, some insurance companies such as Metromile has suggested a new insurance policy based on how often a car is being driven by its owner. Indeed, the company has already attracted a massive following, pulling in a whopping $300 million worth of investment for their design systems to be put in place. The goal of these design systems will be to not only to charge the consumer based on how many miles they drive, but also provide automation when it comes to accident reports for each particular vehicle. A sensor will be fitted in the vehicle to record the data.
Zubie
Other companies like Zubie have opted to have a device plugged into the OBD port of their consumer’s cars, to enable it to monitor the driver. Additionally, the device will even warn the driver of certain parts of the car that require urgent service or replacement. Last but not least, the car owner will then pay a premium based on their driver score.
Kasko2go
As for Kasko2go, they have come up with a strategy to attract consumers with low prices by using smartphone technology to enable users to create their portfolio when they become a low-risk user. That is drivers with a 90% score or higher for not having an accident, and 95% for obeying all the traffic regulations and rules while they are on the road.
So here is their angle. They plan to utilize the discovery of any fraudulent claims as a way to leverage their prices. That is, users will be recorded on how they drive using the app, and hence, the company will be able to determine the cause of the accident in cases where the claim is genuine.
Root
Root, on the other hand, is introducing a policy that aims at targeting Tesla car owners. That is, owners will pay lesser insurance premiums as long as the car is used while in self-driving mode. This is according to data collected by the company, which shows that automated driving is much safer compared to humans driving.
Additionally, there will be a smartphone app put in place to have sensors that will gauge how a driver drives, plus where they live, and their current age. All this information will be used to calculate policy costs. However, much speculation has been brought up that such data could prove to be discriminatory.
That being said, quite a number of companies are approaching the new transition with a lot of positivity. A number of them have embraced the fact that technology is the future; employing the use of motion sensors and smartphone apps to make their insurance premiums a reflection of the situation on the ground.
More in Business
-
Why American Consumers Are Falling Behind on COVID-Era Debt
When the world was grappling with the health crisis brought on by COVID-19, the U.S. economy faced an equally formidable challenge:...
November 27, 2023 -
Dr Dre and Ex-Wife Nicole Young Finalise $100m Divorce Settlement
After months of legal proceedings, Dr Dre, the legendary rapper, producer, and businessman, officially brought his tumultuous divorce from ex-wife Nicole...
November 22, 2023 -
5 Tell-Tale Signs That It Is Time to Say Goodbye to Your Current Job
Are you feeling like your job is more like a ball and chain than a fulfilling career? The daily grind, the...
November 19, 2023 -
WWE Signs $1.4 Billion Broadcasting Contract for SmackDown
In an explosive turn of events, World Wrestling Entertainment (WWE) has just unleashed some earth-shattering news for its legions of fans....
November 9, 2023 -
Navigating the Mortgage Maze as Interest Rates Take a Historic Leap
The U.S. housing market is nothing short of a dynamic entity. It evolves, reacts, and sometimes, just like the current real-estate...
November 3, 2023 -
Celebrity Couples Where the Woman Has a Higher Net Worth
In a world where gender roles and financial dynamics constantly shift, it’s not unusual to find celebrity couples where the woman...
October 27, 2023 -
Why the Gender Pay Gap Could Be Worsening
Picture this: Two college students, Alex and Charlie. Both are bright, have the same interests, and are ready to embrace the...
October 19, 2023 -
JC Penney’s Remarkable $1 Billion Revival Plan
In a remarkable turnaround, JC Penney unveiled a bold $1 billion revival plan, breathing new life into a brand that faced...
October 12, 2023 -
Shattering the American Dream: Mortgage Rates, Inflation & Cost of Living
You know that feeling when you are dreaming of something you have wanted for so long, only to watch it vanish...
October 6, 2023
You must be logged in to post a comment Login