From the Model T to Tesla’s autopilot-enabled vehicle, the automotive industry has come a long way – and it’s not slowing down. With potential for new technology and functionality growing daily, automakers are paving the way for the future of transportation . . . and insurance. Let’s take a look at how the auto industry has transformed insurance over the years, and what’s to come.
Been awhile since you last pulled your trusty Rand McNally atlas from the glove box to help guide your journey? Those days probably seem like another lifetime. How we receive directions has changed dramatically since then. Today, there are 24 U.S.-based GPS satellites orbiting the globe, each providing guidance to drivers everywhere with just the push of a button.
While the availability of GPS has simplified how we get from point A to point B, it has also created an added benefit for insurers by providing a valuable cache of driver data. Thanks to this information, providers will soon be able to adapt policies based on driver habits, creating personalized plans that fit the needs of each individual.
Data gleaned from GPS technology is just one part of the picture. A fairly fresh idea, auto telematics provide opportunities to do even more with driver data, extending into everything from speedometer tracking to mileage logs. However, according to a recent Deloitte report, 74 percent of consumers are not too keen on sharing that data. But given the potential benefits of telematics, insurers are undeterred and have begun offering added value to drivers willing to share their driving behaviors. Those who do can enjoy savings such as lower premiums based on driving performance.
Driverless cars aren’t exactly new to the conversation, but as they creep closer to a mainstream reality they’re worth another look. It’s predicted that in just two years, 10 million driverless cars will be on the road, and automakers like General Motors and Audi are already paving the way. But what does this mean for insurance? To keep pace, insurers will need to build relationships with automakers to better understand new vehicle capabilities and how they affect policies. Together they can work to build relevant plans for an autonomous future.
While proper usage of mirrors is still an important part of a safe driving experience, now 30 percent of drivers say they rely on their backup camera to direct them when in reverse. And that demand continues to grow, with more than half of drivers saying they want a backup camera in their next vehicle. Well, they’re about to get their wish: by May, all new models will be required to include a backup camera.
While this all sounds promising, more technology means more things can and will break – making products like extended service contracts when you purchase a vehicle that much more valuable.
When we look at how much the auto industry continues to change, it’s apparent that insurance will need to continue to evolve with it. These are just a few of the many ways insurers can adapt coverage for new technology to keep customers on track.
Scott McLaren is the Chief Marketing Officer of Fortegra Financial Corporation, a Tiptree Inc. company. He once flew the Saturn VUE Lightship and awarded a Saturn Sky to Travis Pastrana for the first double back flip in the history of the X Games.