Auto insurance premiums are increasingly being influenced by technology. One example is where insurers have partnered with technology companies to monitor drivers. This allows the insurer to track individual vehicles and record each driver’s behavior. Participation in these programs is often associated with a discount and can frequently lower premium rates for safe drivers. Even though there is potential for lower rates, policy holders are not signing up in large numbers. The insurance industry historically has used both statistics and environment and social concerns as a method of setting premiums. Certain factors such as: car type, location, and demographics play a large role in determining the price you will pay for insurance. By providing real time information and feedback, technology can better equip insurance companies to adjust pricing. Technological advances are having a significant impact the insurance industry.
- 1Auto insurers are now moving to Usage Based Insurance
- 2Usage Based Insurance monitors your driving with digital technology, and adjusts your insurance premiums according to that data
- 3This is different than traditional auto insurance, which uses legacy data points such as age, sex, location to define your premium.
Despite the possibility of lower rates, some consumers are hesitant to engage in usage based insurance scoring. A 2015 report on UBI by LexisNexis has revealed enrollment in these programs has plateaued. The study suggested these programs might simply need different motivators and discounts.