To determine policy premiums, auto insurers have traditionally used factors such as driving record, vehicle usage and insurance history. This is in addition to outside variables like customer location (collision/theft rates in the area), age and gender (teen males tend to have higher rates), and non-driving elements like credit score. Recently, however, some insurance companies have begun to harness the internet of things to monitor real-time driving habits. By employing telematics devices, which plug in to the vehicles on-board diagnostic port, insurers are provided with analytics about a policyholders specific behind-the-wheel behaviors. So, instead of paying for collision coverage even when the vehicle is parked in the garage, customers would only pay for it when the cars being driven.
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