Tag Archives: auto policies

How to Repair Car Insurance Policies

Car insurance is, to borrow the title of a book by Ralph Nader, unsafe at any speed. It is a gruesome fact, indeed, as the annual number of automotive fatalities is too large to be an abstraction and too sizable to be a purely academic matter.

Maybe the reform the insurance industry needs—and the safety every driver deserves—comes from without rather than within; maybe those who advocate safety, and agitate (peacefully) for change, are the very advocates who do this for a living; lawyers who specialize in representing car accident victims.

Where there is no room for doubt—where there is no roadway for leeway and no acceptance of maybe as an answer—concerns the status quo. The current system is economically unsustainable and morally unforgivable, a pileup of a disaster that requires cleanup from insurers and better clarity from most lawyers. That is, if we want to lower costs and lessen risk, we must inform drivers of their rights and, pardon the series of automotive metaphors, dissuade insurers from making yet another wrong turn.

According to John K. Zaid, a Houston-based lawyer, companies should invite attorneys to speak to their respective workers about car and road safety. Insurers should join this conversation, too, because it is in their interest to make personal safety a professional priority.

See also: The Sharing Economy and Auto Insurance  

Far from being an adversarial process, these seminars can unite lawyers and insurers. The two share most of, if not all, the same goals—including an emphasis on education, so drivers can be more aware of the dangers they face and automobile manufacturers can produce less dangerous cars, so everyone can profit from fewer risks and more benefits.

Lawyers can give voice to these issues—they already do, when entering a courtroom or issuing opening and closing remarks to a jury. They can be, and are, a voice of reason.

They nonetheless need insurers to convert these voices into a chorus of rhythm and harmony; in which safety is a universal mission; in which life is too precious a commodity for talk about compromise; in which product liability compromises the health of many and the lives—and livelihoods—of millions; in which the way some corporations do business is an increasingly surefire way for companies to go out of business.

Let this chorus be as diverse as possible, resonating in every city, county and state.

Let it echo in the corridors of power and reverberate among the powerful.

Let it be a call to action by lawyers and insurers alike, because we cannot afford to read more statistics without seeing the faces behind the numbers: young and old, rich and poor, parents and grandparents, friends and neighbors.

See also: Beginning of the End for Car Insurance?  

We cannot afford a policy of indifference, whose premiums we can neither permit nor attempt to pay.

We can, however, save lives through a partnership of protection.

We can do so—we must do so—before car accidents become too commonplace to be cause for concern.

The consequences are too important to look or feel inconsequential.

Game Changer for Auto Telematics

Auto underwriting is no longer a “one size fits all” proposition, and technology – in the form of a telematics data exchange – is bringing a tailored approach to more effectively writing individual auto policies. The exchange is an accessible platform of driving information data provided by automakers, telematics service providers and Internet of Things providers. Through the exchange, insurers now have a single and efficient access point to data about driving information.

A telematics data exchange platform has the potential to transform relationships among insurers, consumers and automakers. The platform aims to complement existing solutions, also enabling insurers to bring their own usage-based insurance (UBI) models or other third-party models to the game.

With customer consent, insurers can review the driving history of consumers at point of sale and renewal of auto insurance policies. The exchange can also potentially help manage details of the automaker-insurer relationship, freeing automakers to focus on their core competency in developing advanced vehicles.

In the auto insurance marketplace, there are a few rules of the road:

  • Every insurer using telematics data in determining respective pricing must make corresponding filings with state regulators. As a licensed advisory organization with established filing procedures and government relations, the exchange has the potential to file UBI models and rating guidelines on behalf of insurers, providing faster time to market.
  • Although insurers retain the roles of underwriter and pricing specialist, the data exchange models provide an insurance score, one of the factors that insurers may use as part of their proprietary pricing and underwriting.

The telematics data exchange is a game changer because it brings benefits to insurers, policyholders and auto manufacturers. The power of data and analytics is being harnessed to bring a variety of benefits:

For participating insurers

  • Easy access to telematics data without significant investment in technology and logistical support
  • Improved customer satisfaction through fast, informed quotes at point of sale and renewal
  • Enhanced customer acquisition and retention through innovative UBI programs that potentially attract and retain safe drivers

For consenting consumers

  • Discounted insurance options for lower-risk drivers
  • Portable driving history for ease of insurance shopping
  • No need to plug in a telematics device or use a smartphone

For automakers

  • New revenue from connected-car data
  • Lower total cost of vehicle ownership, which can help boost vehicle sales
  • Additional opportunities for consumer engagement

As use of telematics technology gains acceptance and expands in the marketplace, is it any wonder the game is changing?