How would you like to keep the same insurance coverage, but only pay for auto insurance when you’re actually driving your car? Well, believe it or not, that could be a money-saving option for motorists in the future. A recent new report shows that the technology, called telematics, has been seeing strong growth with a rapid increase for demand among consumers in the coming years.
The technology, which has led to the creation of usage-based insurance (UBI) policies, is used by insurers to track a policyholder’s information when he’s behind the wheel. Drivers commonly pay for these policies, which are often less expensive, only when they use them. In other words, only when it is determined that, through the telematics, the policyholder is driving. The quest for new products for the insurance industry to offer consumers has raised the demand, particularly among auto insurance companies.
According to the report, the availability of usage-based policies went up by 4 percent by the end of 2013, and telematics is expected to grow by as much as 80 percent through 2018. This, in part, will be due to rapid adoption of usage-based auto insurance in the U.S., United Kingdom, and Italy. Furthermore, the discounts these policies will offer consumers are bound to be an appealing draw to give them a try.
With governments beginning to support the implementation of telematics as a means to monitor a policyholder’s driving movements and the willingness of the consumer to give up a little privacy to save some money, usage-based insurance should become extremely popular. As a matter of fact, several automakers are releasing vehicles equipped with telematics, anticipating an upcoming greater demand and allowing for faster growth of the technology, which could become the norm within the auto insurance sector.
Privacy concerns aside, the benefits of UBI far exceed the money savings. It encourages safer driving practices by keeping policyholders more focused on the road rather than possible distractions. One accident or moving violation could nullify the entire program for the driver, thereby, canceling their usage-based policy. For that reason, usage-based auto insurance provides good reason to be extra-careful behind the wheel, by not speeding, following too closely, or running red lights and stop signs.
In the end, it could make safer drivers out of all of us. As the awareness of UBI becomes more universal, drivers will begin to realize the value of driving safely, not to mention the savings auto insurance companies claim they’ll be offering policyholders as a reward for letting them keep an eye on their driving habits.
Obviously, some drivers will be unwilling to give up their privacy and hand it over to Big Brother, but most advocates of the program expect those consumers to eventually come around as many of their peers will adopt the program to save money. In fact, a recent survey conducted by Towers Watson determined that American drivers were less concerned with their privacy than they were with the attractiveness of getting a good- sized price reduction on their auto insurance premiums. So, it appears that usage-based insurance policies are a sign of the not-too-distant future. Will you be ready?
One thing you always want to be ready for is making sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
How do you feel about giving up your privacy to save money with usage-based insurance? Feel free to share your thoughts in the comments section below.