UBI and the Telematics Revolution
Love it or hate it, telematics are here to stay, and Usage-Based Insurance or UBI (of which Progressive’s Snapshot and Travelers’ Intellidrive is derived) has become far more than just a passing fad.
Current models for insurance rating involves statistical number crunching that calculates the risk that the customer could possibly pose to the insurance company. More customers, however, want to be judged by their own driving merits rather than be punished for the mistakes of other drivers.
Homeowner insurance providers are getting in on the action as well, citing the ability to better peg home insurance rates on homes based on usage and individual risks, as well as more accurately rating homes that are unusual cases or don’t fall within typical architectural guidelines (i.e. dome-shaped houses or solar roofs).
And yet, there are still concerns with privacy, as cybersecurity remains an enormous hot-button issue for the perpetually connected. Plus, the change in status quo doesn’t sit well with some. Once all this telematics data is collected, how will it be used? Will it benefit me? Will my insurance rates be effected, and if so, how much?
Despite the concerns, Usage-Based Insurance is marching forward and making strides in providing more value to the customer. Though it’s still an optional component of modern insurance policies, one can’t ignore the immediate no-risk benefits that it offers.
So what do you think? Are telematics the future of insurance? Let us know!
First Baldwin Insurance