This year, auto coverage using telematics devices will finally get its real start before taking off.
Usage based insurance is a type of auto coverage where the actual driving data of the motorist is collected through telematics devices in order to provide insurers with the ability to calculate premiums based on the individual’s actual behaviors and uses of the vehicle.
Some companies have already introduced programs and it is expected that they will explode very soon.
There are a number of reasons that the technology, which has had an off and on beginning, will suddenly take off in the current auto insurance landscape. As a growing number of insurers introduce these programs, it will become a virtual requirement in the near future, if the rest hope to remain competitive.
Though there are a number of additional usage based insurance options now available, it has yet to be fully adopted.
Consumers have not yet embraced the technology at the ideal level, but as it becomes more widespread and common, and as consumers are better educated about the benefits of this type of coverage, it should suddenly skyrocket, and it is expected to do so before the year comes to a close.
Among the reasons that this technology is predicted to take off within 2012 are the following:
• It is no longer limited to onboard devices – though it was once strictly a technology based on onboard diagnostic port devices for collecting data, many cars already have built-in connectivity which allows for much easier data transmission.
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• Consumers are becoming more comfortable with data sharing – though some consumers remain suspicious about transmitting information about themselves to insurers, the social media and mobile revolution has decreased this percentage significantly. This is especially true when they feel that the benefits are worth the risks.
• The convenience is improved – the new technology means that all of the work is done by the vendors, making it much simpler for consumers to use the technology.
• More opportunities from more information – the more insurers are capable of collecting accurate information, the greater the opportunities they can offer.
• Telematics are a natural fit – usage based insurance can be naturally and seamlessly integrated into auto coverage due to their very natures.