When the concept of “usage-based” auto insurance – which tracks’ drivers habits and bills them accordingly – was first introduced, many experts were concerned about the so-called Big Brother implications of these plans, and wondered whether consumers would take to them. However, it seems that the ability to save money trumps whatever privacy worries they might have had. Insurance agents who can help consumers better understand what this kind of coverage entails, and what impact it might have on consumers’ costs going forward, might be the ones who have the most success in boosting their business.
The latest data suggests that property and casualty insurance premiums have increased across the board in recent months, and as a result, many companies are seeing increased numbers of drivers signing up for usage-based auto plans in particular, according to a report from Insurance Business America. In fact, insurers are actually seeing these increases come mostly through new clients, suggesting a significant migration to those that provide such options.
The future of the industry?
Experts further note that as of now, this kind of thing can be very helpful to drivers looking to cut costs because when they switch companies and use these plans, their driving records (at least in terms of the habits tracked by this kind of coverage) effectively reset to zero, the report said. But that kind of information might soon be shared between insurers, which might help to keep retention rates as high as possible. If that happens, then there might be more of an emphasis on safe driving techniques, rather than clients simply switching carriers every time they feel their rates have gotten too high.
The reason so many people may be attracted to this kind of coverage is that it might affect their driving habits for the better and end up reducing their ongoing coverage costs significantly. However, insurance agents should be ready to do more than just provide the occasional discount on coverage; if they can also bring high-quality customer service to the table, that might end up proving even more valuable in terms of keeping customer retention rates as high as possible. Those who can take it one step beyond that and combine that service with additional discounts might even see increased client rolls through positive word of mouth.