CONNECTED CAR
WHAT IS USAGE-BASED INSURANCE ?
CONNECTED CAR
WHAT IS USAGE-BASED INSURANCE ?
Insurers have recognised the opportunity that EVs provide for usage-based insurance or ‘ UBI ’.
What this means is drivers with UBI agreements will pay as they drive , which is expected to lower premiums for good drivers or those who don ’ t drive as much . This solution does away with the previous requirement to set a specific annual mileage with an insurance provider , and instead tracks the mileage to create a ‘ pay as you go ’ model — much like how a homeowner would pay the energy bill .
Technology is already integral to both consumers and businesses operating in the car insurance industry . From a commercial perspective , there are solutions like telematics that can track individual cars and assess the safety of the user ’ s driving style .
In the eyes of the consumer , technologies that track their vehicles , like telematics , act as money-saving solutions but can also fill some individuals with concern — they ’ re being tracked ; they ’ re being watched .
The fact of the matter is that technology is a critical component for driving safety and enhancing sustainability , and there are most certainly benefits from telematics and other solutions , particularly from a cost point of view .
Electric vehicles ( EVs ) will only force this into wider use as every car becomes traceable and organisations can begin offering out pay-as-you-go insurance models , which are based on the amount an individual uses their car and the routes that they take . Ultimately , this solution may result in a 20 % to 30 % cost reduction in comparison to traditional insurance policies .
This is something that automotive manufacturers can expect to use moving forward , particularly because EVs enhance the technology integration process , with every component being part of an electrified system .
As cars enter the digital ecosystem , telematics , usage-based insurance ( UBI ) models , and other digital solutions are being used more frequently — many for several years already .
“ There is already technology in place that tracks driving conditions , driver traits , traffic , payloads , charging , and maintaining schedules , which provide the real-world insights necessary to accurately assess driver performance ,” says Max Eversfield , Enterprise Field Solution Consultant at Samsara .
“ Improved safety is the most important benefit from these technological advancements , but that isn ’ t to say there aren ’ t others at play . Insurance premiums are also brought down as a result of these instalments , as safer drivers means accidents are far less likely to occur , making vehicles easier and cheaper to insure .”
36 [ Feb 2023 ] EVMAGAZINE . COM