Is Usage-based Insurance the Future of Auto Insurance?

Apr 21, 2016

  1. RobertJH95
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    RobertJH95 New Member

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    Hi guys!

    Let me start of by introducing myself. I'm Robert H, a 20 year old student from the Netherlands who's currently writing his bachelor thesis at Leiden University.

    As a part of my thesis, which is about the future of usage-based insurance (UBI) I'm mapping the worldwide interest in telematics and usage-based insurance.

    For those who are not familiar with UBI, Usage-based insurance also known as pay as you drive (PAYD) and pay how you drive (PHYD) and is a type of vehicle insurance whereby the costs are dependent upon type of vehicle used, measured against time, distance, behavior and place. This allows an insurer to offer premiums that are more tailored to the users of a vehicle than is possible with a traditional motor insurance policy.

    You can help me out by filling in a survey existing out of 14 multiple choice questions. It honestly takes no longer than 5 minutes! Since I can't post the URL in this thread let me know if you are willing to take the survey. I'll pm you the TypeForm url.

    For all of those that fill-out the survey, thank you so much for helping me graduate and allowing me to make a kicks ass report! For those who are interested I'll post the results at the end of may!

    If you've got any questions in the meantime, feel free to contact me at any time!
     
  2. djs
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    djs Super Moderator Moderator

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    Actually, this describes traditional auto insurance exactly.

    Typically, pay as you drive type of insurance has less rating factors and tends to put everyone in 1 bucket for rating. The typical usage scenario I've seen is paying for insurance as a surcharge to your gas (petrol). This means your insurance costs is based on your vehicle mileage and where you buy the gas. Beyond that, it isn't really tailored to you.

    Maybe the Netherlands does insurance different then the US, but those who pay higher rates, tend to want less individualized pricing. Those who pay lower rates, like the way it is, but will pay more (usually) in a system that removes rating segmentation.

    Dan
     
    djs, Apr 21, 2016
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  3. RobertJH95
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    RobertJH95 New Member

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    Thanks for clarifying Dan! I'll have to look into the difference between North America and Europe.

    By UBI I mean policies were mileage and driving behaviors are tracked using odometer readings or in-vehicle telecommunication devices (telematics) that are usually self-installed into a special vehicle port or already integrated in original equipment installed by car manufactures. The basic idea of telematics auto insurance is that a driver's behavior is monitored directly while the person drives. These telematics devices measure a number of elements of interest to underwriters: miles driven; time of day; where the vehicle is driven (GPS); rapid acceleration; hard breaking; hard cornering; and air bag deployment.

    May I send you may survey you can check if it's suitable for North American drivers?

    Thanks for your reply,

    Robert
     
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