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Bad driving habits can increase the risk of an accident and lead to auto insurance premiums. Insurance companies are on a mission to try to eliminate these bad habits, encourage safer behavior and more precise pricing policies based on the responsibility of their customers behind the wheel.
Telematics is the approach adopted by many insurers. Telematics involves the use of GPS technology and on-board diagnostics to monitor the behavior of motorists. Those who drive safely are rewarded with lower premiums.
Nationwide is one of the insurers harnessing the power of this technology. And a recent study conducted by the insurer showed that more customers are open to using it. Not only that, but it benefits both the drivers who adopt it and other motorists on the road.
Consumers are opening up to telematics
According to At national scale, nearly half of all consumers indicated that they would be interested in participating in a telematics program. This includes:
- 46% of customers who said they would participate in an auto insurance program where they would pay per mile. This type of program would benefit infrequent drivers who are less likely to have collisions because they spend less time on the road.
- 45% of customers said they would be interested in a program that tracks their habits and rewards them with discounts for safe driving.
Motorists are increasingly accepting the surveillance technologies that would be necessary for these programs to function. In fact, 45% of people who responded to Nationwide’s survey said they would agree with a device that collects data about their driving habits and behavior, compared with just 36% who said they didn’t. no problem with streaming services that tailor ads to them based on viewing habits.
Why are motorists so open to telematics?
Drivers may be more accepting of telematics technology than other types of surveillance, as telematics can result in substantial savings on their insurance costs.
“Telematics gives the customer more control over their pricing by factoring in individual driving behaviors into their premium,” said Sarah Jacobs, vice president of personal line product development at Nationwide. “In fact, our average telematics customer is saving 22% compared to our traditional programs. ! “
The cost of insurance is a major concern for many, with 73% of consumers responding to a 2020 survey indicating that rising auto insurance costs are cause for concern. Many motorists unhappy with the cost of auto insurance think they shouldn’t have to pay as much as their peers because they think they are personally safer to drive. In fact, 66% of people think their costs should be lower because of their good driving habits.
Telematics is ideal for these customers because the technology gives them the opportunity to demonstrate their skills and be rewarded for it. And, some evidence suggests that motorists who embrace this new technology could actually help everyone.
“By rewarding safer driving with lower premiums and providing the ability to get ongoing driving feedback through our app, we also hope to influence a safer driving environment on the roads,” said Jacobs. “We saw that with our distracted driving telematics program, which resulted in a 9% decrease in distracted driving in the first six months. “
How to decide if telematics makes sense
Motorists looking for an opportunity to save on insurance should inquire about the telematics programs provided by their auto insurers.
If they’re willing to give up some privacy and are confident that their driving habits will lower their insurance costs, they don’t have much to lose by signing up.
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