5 Technologies That Benefit Insurance Consumers

Businessman using a modern interface. Getty Images/StockFinland

1. Usage Based Auto Insurance

Chances are, if your auto insurer doesn’t offer usage-based insurance (UBI) also known as pay-as-you-drive (PAYD) insurance or pay-how-you-drive (PHYD) insurance, it soon will. With usage-based insurance, you allow a telematics device to be installed in your vehicle which in turn allows the insurance company to monitor your driving habits. If you are a safe driver, your good driving habits may earn you a lower insurance premium than other people who have bad driving habits.

According to the National Association of Insurance Commissioners (NAIC), approximately 20 percent of all auto insurers will offer usage-based insurance within the next five years. Once the telematics device is installed in your vehicle, it monitors your driving habits and records them. Some of the activities monitored include where and when you drive, the number of miles you drive, any periods of rapid acceleration or hard breaking. While some drivers have voiced concerns regarding privacy of personal data gathered, top companies offering usage-based insurance, such as Progressive Insurance, report that there is no interest in tracking drivers’ personal data and the data is not shared with any third parties.

How does usage-based auto insurance differ from traditional auto insurance? With a traditional auto insurance policy, your insurance premium is determined by a number of factors including past driving history, make and model of your vehicle, the mileage and how you use your vehicle (such as using the vehicle to drive long distances for work commutes or exclusively for recreational driving).

What a traditional auto policy doesn’t take into account that is factored into the insurance premium by usage-based insurance is your present patterns of driving. For example, even though you’ve had accidents in the past, you may be a very safe driver now.

Usage-based insurance is a win-win for the policyholder and the insurance company in that it provides an incentive for the driver to adopt safer driving practices which in turn, lower the amount of accidents and the number of claims the insurance company has to pay out.

One advantage to the policyholder is that if you make changes during the month that would affect your premium; for example, you quit your daily work commute and start working from home, your premium reduction goes into effect immediately.

While usage-based auto insurance may not be for everyone, people who are currently paying very high auto insurance premiums because they have been classified as high-risk drivers may find that usage-based insurance can reduce auto insurance premiums significantly. Not everyone’s insurance premium goes down with pay-as-you-drive insurance. While some people will receive significant savings, other driver’s insurance premiums will go up.

Even if your auto insurer offers usage-based insurance, it is a voluntary program and not mandatory. If you do not want your data gathered and sent to your insurance company by a telematics device, then this type of program may not be for you. If you have specific questions about what data is collected and how it is used, you should contact the insurance company offering the program. The insurance company should have a disclaimer on its website that tells more about its privacy policy and how any personal data gathered will be used.

The technology responsible for usage-based insurance also adds the possibility for other driver services that many insurance consumers may find beneficial such as vehicle wellness reports, vehicle theft tracking and automated emergency response capabilities. It is possible that in the future, many auto insurers will begin incorporating these features into UBI programs.

Before deciding on any type of usage-based auto insurance program, it is best to do your homework. Read up on the company offering the program and read user testimonials of how the program worked for them. The more knowledge you arm yourself with, the better prepared you will be when choosing the right type of insurance. Some usage based insurance programs to check into include Nationwide SmartRide, Metromile, Safeco Rewind, Travelers’ IntelliDrive, Hartford TrueLane, State Farm Drive Safe and Save; and Esurance DriveSense.

2. Alexa

It is likely you have seen the television commercials for Alexa, the intelligent personal assistance developed by Amazon. Alexa, introduced by Amazon in 2015, is voice-activated and responds to spoken commands to do anything from reading your newspaper out loud or providing current weather and driving conditions; to controlling switches and thermostats in your home. 

Recently, Grange Insurance has a new app compatible with Alexa that will allow you to find an independent insurance agent or to research an insurance company’s insurance options. Nationwide and Safeco had previously partnered with Alexa (aka Echo) to provide these services to their customers.

For policyholders who also have Alexa, they now have a way to interact with their insurance carrier that is convenient and easy to use. It is just another way innovations in insurance provide solutions to consumers who need to multi-task to keep up with their busy lifestyles. It will not be surprising as more insurance carriers add an application that is compatible with Alexa.

3. Virtual Insurance Agencies

Insurify is a virtual insurance agency that has used artificial intelligence to allow insurance customers to obtain a quote through texting a picture of a license plate. For consumers who are looking for ease of use as a #1 feature, this will appeal to many. The application is known as Evia (Expert Virtual Insurance Agent). 

Insurify has a partnership with several top insurance companies to provide a wide range of policy offerings to insurance consumers. Some of these partners include:

If you want to sign up for this application, visit the Insurify website or call 781-369-5695. Although Insurify’s Evia was the first of its kind in an intelligent and virtual insurance agent, don’t expect it to be the last. Similar apps are expected to follow as the demands for new insurance technologies to help with shopping for insurance/servicing existing policies increases.

4. Mobile Insurance Applications

Mobile insurance applications are a must for any insurance carrier that wants to keep up with the modern consumer. Life is lived for many with constant mobile interaction. These “mobile” customers are looking for a way to access insurance products and services through their smartphones or Android devices.

A really good mobile insurance application will allow you to shop for a policy, purchase it and then service your policy or file a claim—all through your mobile device.If you don’t have a mobile insurance application downloaded, check with your insurance carrier. It is likely that one is available and many are free to download, especially to policyholders.

Some of the mobile applications available include: GEICO, Safeco, Travelers and many other top-rated insurance companies. You should check with your mobile carrier regarding message and data rates that may apply to mobile applications.

GEICO, has recently added a new virtual assistance tool to its mobile application called Kate. Katie will answer questions about your balance, next payment date and coverage details by speaking to her or by typing in your question. It is similar to Apple’s Siri.

5. Car Safety Devices

This technology is not specifically from the “insurance industry” but rather from the automotive industry. However, new advances in car safety devices can help you save big bucks on your insurance premium.

Some insurance carriers, such as Liberty Mutual Insurance, offer a discount if you have these new auto safety innovations installed in your vehicle:

  • Adaptive Cruise Control: An adaptive cruise control device monitors traffic conditions and will adjust your speed to make sure your vehicle is a safe distance away from the next vehicle in front of you.
  • Collision-Avoidance: A collision-avoidance system has built-in sensors that recognize when a collision is likely to occur including a fast braking incident or if another vehicle in front of you skids and swerves. The system can apply your car’s brakes and take other preventive actions to protect you and the other passengers in your vehicle.
  • Lane-Departure Warning: The lane-departure warning feature has a built-in camera that tracks your position and alerts you if your vehicle drifts out of the lane you are driving in.

These are only some of the new safety features developed recently that will not only keep you safe on the road but also reduce your auto insurance premium. As the demand for safety technologies grow, so will the number of these devices available to the consumer.