Personal Finance Expert
Tyron Jones is a finance expert who has operated within the auto insurance business for more than 10 years. He has written many other finance related articles for a number of prominent publications.
Understanding the Role of Technology in Insurance
Technology has always played a huge part in the insurance industry. Insurance companies use technology to find better ways to do business. For example, in the past you’d have to physically visit or call several insurance companies to get a quote. Now you can log on to a website and see quotes from different insurance companies in seconds.
Insurance uses other innovations too. Insurance is a risk-based business. The more information a company has on someone, the more accurately they can tell what kind of a risk that person represents. That’s why some car insurance companies started to use technological tools to help track their customers.
Many companies offer these tools. They most often take the form of a device that plugs into your car. The device reads information about how you drive. It looks at how you accelerate and brake. It also looks at how fast you go.
This information gives car companies the ability to more accurately predict the chance someone will be in an accident. That allows them to set individual rates appropriately. If you are a safe driver, then your rates are lower. However, if you drive over the speed limit, accelerate quickly and brake at the last second, your rates will go up.
This helps car insurance customers all around. That’s because they get a greater amount of individualization on their car insurance rates. The company can charge them less because it’s charging less-safe drivers more. As a result, they don’t need to use other safer drivers to supplement the losses caused by the less-safe drivers.
Insurance companies also benefit from technology in other ways. One of the most common tools insurance companies offer is an app. Car insurance companies use their apps to make submitting claims fast and easy.
Not only does this technology make it easier for a customer to submit claims, but it also makes it easier for the company to process them. The app can walk the customer step-by-step to get all the information the company needs.
Most companies even let you upload pictures of the damage to your car with your claim. That saves the insurance company money on sending agents all over to inspect damage. As a result, they can offer cheaper policies. They can also clear and approve claims much faster. That makes their customers happy.
How AI is Improving Car Insurance
One of the biggest technological breakthroughs in recent years has been the development of AI and machine learning. This process allows computers to track lots of complex information. The computer uses that information to achieve its programmed goals. That can mean huge savings and lots of convince for customers. It also means lower costs and better profits for car insurers.
Computers can handle lots of information more quickly that a person can. That means that AI makes car insurance companies more efficient. It also means that insurance companies can connect with people more efficiently. One example is the new app Gabi.
Gabi is an innovative app that helps users buy car insurance at the lowest rates. You connect your current policy to the site. You can also upload a PDF of your current coverage. The app starts scouring the internet for a better rate. It looks at lots of different insurance companies. This includes large, national companies, as well as smaller, local firms.
One of the best things about this app is that you aren’t swarmed with follow-up quotes and emails from car insurance companies. Instead, the app constantly works in the background, trying to find the best rate. They search for policies for you when your renewal time is coming up. That means you don’t need to worry about doing more car insurance research every six months. Instead, the app just serves up the best options for you to choose from.
Another example of AI in the car insurance industry comes from Ladder. This company uses artificial intelligence to help underwrite their insurance policies. That means you can have a new policy in a matter of minutes. All you need to do is tell them the coverage level you’re looking for an answer a few basic questions online.
Additionally, this company lets you alter your coverage. They call it laddering your coverage. You can get more coverage if you need it. You can also decrease your coverage. For example, if you’re going to travel for a month, then you can reduce your coverage to the minimum possible to save money.
Artificial intelligence also makes it easier to shop auto insurance rates. One example is the tool Insurify. This tool acts as a car insurance comparison tool. It comes with Evia, a virtual agent. Evia is available 24/7, so you can always access the information you’re looking for.
The tool offers the ability to compare insurance quotes from top companies. It also provides recommendations and advice for insurance buyers to help them get the best deal. It’s also easy to use. You can take a picture of your car’s license plate and upload it to the tool. Insurify then uses the information associated with the license plate to start shopping for insurance quotes for you. The service is available in all 50 states. It provides real-time quotes from more than 80 carriers.
It’s hard to overstate the effect that technology has on our lives. In the past 30 years, we’ve gone from a society that operated from land-line telephones and reams of paperwork to one that carries a globally connected information library in every pocket.
The car insurance industry is no different. The ability to more accurately manage risk, compete for customers, connect with customers, and process claims has already altered the way that car insurance companies do business. Only time will tell what other technological advances are in store for the auto insurance industry.
How AI Saves Customers Money on Car Insurance
There’s a lot going on with AI and the car insurance industry. However, unless you’re a car insurance executive, you probably don’t think that any of the latest information applies to you or impacts your wallet in any way. That’s where you’d be wrong.
It’s important to keep in mind that car insurance isn’t just a risk-based business. It’s also an industry that is acutely aware of its own costs. Moreover, there’s also a lot of competition between different insurance companies for customers. As a result, car insurance is one industry where corporate savings are usually passed on to the customer.
That’s where AI can benefit consumers. Artificial intelligence can help car insurance companies save money. It does this by helping with everything from claims processing to adjustments and repairs. The more that AI can automate and streamline, the lower the cost will be to the business. The result of that is a lower cost to the consumer.
AI for Consumers
However, that’s not the only way that AI can help customers save money. One company in California, Clearcover, uses AI to help consumers pick the best insurance plan for their needs. That means in addition to AI cutting costs for businesses, it also helps customers find the exact right policy they need. As a result, customers neither pay too much for insurance they don’t actually need, nor do they pay too little and find themselves at risk when it’s time to make a claim.
Another way that businesses are using AI and machine learning to save customers costs on car insurance is through driver tracking and analytics. These programs are increasingly popular, even amongst the biggest insurance agencies, and there are small agencies that use this model as the basis for their entire business.
The way it works is simple. The company uses an app on your smartphone or a specialized device that plugs in your car to track how you’re driving. AI and machine learning can analyze your driving patterns, trends, and behavior to more accurately predict the chance that you’ll file a claim. As a result, the company is able to deliver more accurate quotes based on hard evidence. That sets these companies apart from those that rely on traditional information exclusively to set rates. That’s because traditional driver information doesn’t provide an accurate picture of how you’re actually using your car. These apps do. The result is greater savings for good drivers and more savings for everyone as bad drivers are pushed to high-risk policies.
As you can see, there are a lot of ways that consumers can benefit from AI and machine learning in the car insurance industry. Use this information to make informed decisions about the best car insurance company for you. Consider what kind of technological features and options each company has to get a more accurate picture of where you’ll get the best savings. Remember, you work hard for your money, there’s no reason to spend too much on car insurance if you don’t need to!