When it comes to pricing, ultimately there are two options: pricing with data and pricing without. We’re sure you can guess which option works better.
Auto insurance pricing is based on several factors, including the driver's age, gender, driving record, and the vehicle being insured. Vehicle data can be used to improve the accuracy of the latter two factors, which can lead to lower premiums for drivers who are at a lower risk. For example, vehicle data can be used to calculate a driver's risk score. This score considers multiple elements, such as how often the driver uses their car, how far they drive each day, and their driving habits. Drivers with a lower risk score will be charged lower premiums.
You can lose more money than ever by being wrong about the vehicle insurance to value gap – both by missing the opportunity to personalize a risk assessment and/or by not knowing the value of the vehicle you would need to replace.
It's worth noting that vehicle data can also be used to detect fraud. For example, if a driver claims to have been involved in an accident that never happened, vehicle data can be used to prove that the accident did not happen. This can help to prevent insurance fraud and keep premiums low for all drivers.
