Today we share a contributed post from fellow freelance writer Elaine Valarie. Enjoy!
In its simplest state, auto insurance protects motorists after their involvement in an accident. Different policies offer different coverages, with liability car insurance being the most popular among consumers. The reason for this is also simple: a majority of U.S. states require their auto drivers to carry liability car insurance. But the insurance industry is changing, with new technological developments raising customer service. Let’s check out some of these big changes and how they will impact the auto industry, and subsequently, you as an insurance-payer.
5 New Auto Industry Developments that May Affect You
What exactly is telematics? Telematics is a technological device that combines information and telecommunications. Many insurance companies offer the option to install a device that measures your driving habits, such as how many miles you drive, how hard you brake and your speed. The telematics system sends this information to your insurance agency. If your insurance company believes that your numbers demonstrate you as a safe driver, you will get a good driving discount. But if the system reports that you are not a safe a driver, don’t worry; your insurance company will not raise your premiums, at least not yet. While telematics is currently in use, we’ll see widespread adoption by insurance companies in the coming years.
Insurance agencies base their premium numbers on risk factor. Factors they consider in determining your risk include:
- ZIP code
- Marital Status
- Make, Model and Year of Vehicle
After determining your risk factor, the insurance agency issues you your monthly premium. So what is Big Data? According to Forbes Magazine, Big Data refers to the amount of digital information that is generated and stored, and the sophisticated analytics procedures that are being developed to make sense of the data collected. In layman’s terms, this means agencies are collecting data about you and determining the likelihood of your involvement in an accident through predictive statistical modelling.
With forward-collision warnings, blind-spot monitoring and lane-departure warnings, the Insurance Information Institute (III) reports that the number of predicted auto collisions will drop dramatically. III further reports that the improvements in safety technology have led to lower fatality rates. Because of these developments, insurance agencies could lower their premium rates. But there is a catch here. Insurance companies haven’t yet compiled enough information on crash avoidance technology. Agencies are still gathering information on product liability claims. If product reliability claims should rise, insurance premiums will reflect this. So, where one area in your policy may give you a discount, another area may charge you for more coverage.
To stay competitive in the market, insurance agencies are offering auto insurance policies at discounted rates on insurance comparison websites. According to Property Casualty 360, in offering their services online through mobile applications and websites, insurance agencies are working to make it easier to file claims, get quotes and make appointments with agents to discuss policies. Comparison sites like CoverHound take your information and run it through a variety of filters. After evaluating your information, these sites show you the most affordable price ranges from top-rated insurance agencies. After you select the policy you want, you will continue through the portal to sign on for said policy.
With Google and Tesla working on self-driving cars, insurance agencies will have to establish insurance policies that take into consideration operating maintenance and product liability, such as is considered under crash-avoidance technology. Automated vehicles will engage in front-end braking and lane-departure warnings. Automated vehicles will also allow drivers to take control of the vehicle, going from automated to manual driving. This chosen balance of automation versus manual driving is likely to play a big factor in the premium prices a self-driving vehicle owner pays.
Driving technologies are evolving, and with it so is the auto insurance agency. Use these developments to save money when you renew or get a new auto policy.
Bio: Elaine Valarie is a ghost writer, curator, literature geek and author. She has several journals, articles and papers to her name. Writing is her passion. She writes about mostly all genres. She resides in Hoboken, Hudson County in New Jersey.