September 11, 2013
Agency
Use-based car insurance is growing
By Tara Baukus Mello
The interest in use-based car insurance — where consumers pay insurance rates based on their driving habits — is growing, with 36 percent of consumers saying they would change carriers for a 10 percent discount on their car insurance rates, according to the 2013 Telematic Survey by Lynx Research Consulting for LexisNexis.
Usage-based auto insurance uses a telematics program to determine the time, frequency and manner in which the car is driven, collecting the information and providing it to the insurance company to determine if a driver is eligible for discounts on insurance premiums. One-third of respondents said the idea was appealing and are likely to allow a personal smartphone to be used to collect and transmit the necessary data.
The study found that 61 percent of drivers are more likely to accept telematics if insurers offer a three-month trial period, while 72 percent are more likely to accept a program if the car insurance provider offers an automatic 10 percent discount during the first six months.
How about you? Would you accept telematics?