These wireless device based “pay as you drive” policies are rapidly evolving and are becoming more popular.
Usage based technology is becoming increasingly popular in auto insurance, as a growing number of insurers start to offer policies that use these wireless telematics devices and a larger number of motorists sign up for these programs in the hopes of qualifying for lower rates.
Many are now predicting that in ten years from now, these policies will be the norm.
In fact, some have forecasted that usage based technology will become nearly a requirement for auto insurance policies and that individuals who choose not to participate will be required to pay an inflated premium for their coverage. Though not the majority, there is also a group that feels that auto policies will involve the use of these devices and that other forms of tracking-free coverage will cease to be offered.
It isn’t difficult to believe these predictions about usage based technology in auto insurance, considering the trends.
Many major auto insurance companies in the United States, Canada, the United Kingdom, and other countries are already offering policies that use this wireless tech. They are saving a considerable amount for drivers with safe habits, and motorists that prove that they are a lower risk.
These high tech mobile devices are record a considerable amount of data regarding the use of the vehicle, such as the number of trips that are made, the time of day that the vehicle is being used, and how it is being used (such as speed and hard braking).
Although there have been some considerable concerns voiced regarding the protection of privacy and of data security, it is still believed that usage based technology in car insurance will soon become a program to which a driver will need to “opt out” instead of “opt in”. This was the opinion voiced at the British Insurance Brokers’ Association (BIBA) seminar. Tom Ellis of Gocompare spoke at the seminar and said that “In 10 years’ time there will still be customers who prefer not to have a telematics device installed, [but] it will be an opt-out situation, rather than an opt-in.”