Ride hailing and car sharing programs have changed transportation and are now changing coverage.
Allstate CEO Tom Wilson explained that the auto insurance industry should expect some substantial changes due to ridesharing companies.
These services have altered the way that vehicles are used so that they are no longer defined by auto products.
The interview was reported from CES 2019 by a Cheddar article. In it, the Allstate CEO underscored the change ride hailing and car sharing services have made to personal transportation. That said, traditional auto insurance products don’t cover vehicles for that type of use. Therefore, the popularity of those services and the need for coverage for those types of vehicle use are redefining the way car insurance is purchased.
At the annual event in Las Vegas, Nevada, Wilson said that simply insuring a car in the way we currently do will soon become a thing of the past. The reason is that many consumers are no longer purchasing their own vehicles exclusively for their own use.
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The issue the Allstate CEO addressed was the fact that people increasingly drive cars they don’t own.
A growing number of Americans are driving vehicles they don’t own. “What’s going to happen in the future, I think it’s going to be split,” said Wilson. “Insurance right now follows the car. But you should have insurance for what you do as a driver.”
Wilson’s description of a dual insurance model doesn’t necessarily imply that insurance costs will increase. In fact, Wilson explained that Allstate currently tracks 8 billion miles of data every month. The nationwide insurance company is currently using that data to help drivers to receive more accurate pricing based on their actual safety behind the wheel. This eliminates much of the need for guessing and estimates in terms of a driver’s unique risk.
Currently, the auto insurance industry’s foundation for personal transportation is “really inefficient, and it needs to be changed,” said Wilson. “We see it as an opportunity, not a risk,” he added, pointing out that the challenge will be to be able to the way this business is evolving.