Free Press Journal

How IoT Can Streamline the Car Insurance Industry

FOLLOW US:

Internet of Things or IoT is set to automate the traditional processing of auto insurance industry. It will provide added opportunities to the automotive insurance companies to garner their customers’ data and will also help them deliver advanced insurance services in a personalized manner.

Ford and Hyundai are gradually leveraging mobile technology to enhance their in-vehicle IoT platforms.  A number of other motor brands are gearing up to follow in their footprints for the array of benefits that IoT provides. Predictably, IoT-equipped cars are more likely to become popular with tech-savvy buyers. Furthermore, auto-manufacturers and car insurance providers will be able to analyze the information from individual drivers accurately. Internet of things (IoT) will certainly reduce the time consumed in a claim settlement process and will also reduce the frequency of false claims.

Lack of accuracy and manual processes are the main reasons behind the erratic automobile insurance process. IoT is growing to become a game-turner in the auto insurance industry due to its ability to gather data in a convenient manner. It would help auto insurance companies to monitor the real-time condition of each vehicle. Integration of Internet of Things will certainly result in happy customers and also increase the sales of insurance services.


Benefits of Internet of Things to Customers & Car Insurance Companies

Internet of Things will help the insurance companies in tracking many insurance-related woes. This technology is likely to transform the entire Automotive Insurance Industry. Let’s take a closer look –

  1. Since the past few decades, the insurance policies are being designed to focus on the vehicle rather than the policy-holder because the risk profile of a driver cannot be assessed accurately. The IoT model is certainly going to help insurance companies in reducing such risks and mitigating the costs.
  2. IoT-based analytics can also be utilized to predict the weather conditions. This will prepare customers for any upcoming weather-related event and might reduce any damage due to such unforeseen events.
  3. Vehicles embedded with IoT devices will provide real-time data to the insurance provider, as well as the car driver. Accidents will be reduced to a great extent as the information about the current condition of vehicle parts will be shared with both the car driver and the insurer. It will also help in recognizing any failure of the vehicle parts and will provide warning signals for over speeding, and other critical situations.
  4. With an embedded IoT device in a vehicle, insurance companies will be able to derive information about the driving pattern of the customer. This will further help them in determining the risk profile of the car driver based on the average speed of the car and usage of brakes while driving.
  5. Based on the risk profile of the car drivers, the insurance providers can easily decide the cost of the car insurance This will highlight the disparity between a safe driver, who is less likely to make insurance claims, and a customer who is prone to make more claims. And, as compared to a comprehensive pricing module, this customized cost will provide more satisfaction to the customers.
  6. While parking a car in a shopping mall, office building, or any other public parking spaces, an IoT embedded vehicle can update the driver regarding the availability of the parking space. This will save a lot of time and effort.

Internet of Things will offer easy access to real-time information and will help different industries in analyzing various risk-factors.  As a result, taking preventative measures will also become easier. IoT has already started creating a huge buzz around the world for its highly innovative features and personalized application in almost every industry.

Other Advancements That IoT Will Bring In the Auto Insurance Industry  

  1. Easy Detection of Fraudulent Activities

Auto Insurance Companies detect a huge number of fraudulent claims every year. IoT embedded vehicles have the potential to reduce the percentage of such fraudulent claims. It will make it convenient for the auto insurers to be aware of the condition of a vehicle and its parts. Also, it will be possible for auto insurance companies to distinguish between old and recent damages, thus letting them process a claim against latest damages only. IoT will also warn the drivers in case of failure of any parts, over-speeding, and alarming proximity of other vehicles.

  1. Roadside Assistance and Emergency Services

In case of any accidental damage to the car, IoT devices will update the insurer about the incident. Based on this report, the information will be redirected to a nearby service provider. Hence, the reach time for roadside assistance and emergency services at the accident spot will be reduced considerably.

  1. Tracking the Status of Damage Repair

This will reduce the follow-up time by making it possible for the insurance companies to track the status of the vehicle sent for repairs. Customers will be updated about the repair time and will receive an update when their vehicle is fixed or if there is any delay. Based on this, customers can also evaluate the size of damage and get a rough estimate of the claim amount that the motor insurance company is likely to settle.

  1. Vehicle Inspection and Report

 IoT devices will make it possible for the insurers to derive the reports about the current state of vehicle parts and the real-time cost of replacing them. This will save the time that goes into manual inspection and simultaneously provide highly accurate reports to the auto insurance company.

Summing it up –

IoT seeks to make driving more enjoyable for the car owner and can also make insurance process hassle-free for the auto insurance companies. It is most likely that automotive companies who have not yet delved into IoT will find themselves at a disadvantage in future. The millennials will only appreciate technology-equipped cars and will not hesitate in switching to another auto-brand if their needs are not met.

Also Read: Life Insurance- Going Beyond after-life Investment