With so many changes in the auto industry and our lifestyles, it’s no surprise that auto insurance trends are changing, too.
As an insurance agent, you know that the industry is constantly changing. That’s why it’s essential to stay up-to-date on the latest auto insurance trends so you can be ready for whatever comes your way.
Whether it’s the introduction of autonomous vehicles or more detailed data, the way we move from place to place is changing. And in order to remain competitive as an insurance agent, it’s vital to stay ahead of these changes.
These 5 auto insurance trends are shaking up the industry
1. The Rise of Electric Vehicles is Changing the Auto Insurance Landscape
With the rise of eco-friendly electric vehicles, auto insurance trends are changing in ways auto insurers never expected. In the past, auto insurers took into account numerous factors when deciding how to price auto coverage: from the number of miles driven to the make and model of the car. But with today’s auto insurance customer wanting to go green behind the wheel, auto insurers have to factor in whether a customer is driving an EV. As a result, what once was a simple calculation is becoming far more complex as auto insurers determine what type of discounts EV owners are eligible for. In addition, some insurance companies are developing new auto insurance packages designed specifically for EV owners. It’s quite the wild ride – but if you stay ahead of these trends, they can prove beneficial!
2. More People are Using Ride-Sharing Services, and this is Affecting the Rates
There are now more people than ever relying on ride-sharing services to get them from point A to point B, affecting fares. Talk about disruption! Thankfully for consumers, increased usage means overall prices tend to drop because of natural competition. But there’s something else happening here, too – technology is fundamentally changing the way we look at transportation, giving us new efficiencies while ensuring people never have to worry about hailing a cab again.
We’ve also noticed a national trend that more teens are choosing to learn to drive later in life. Rising fuel costs, economic inflation, and the expensive used car market contribute to teens not getting into the driver’s seat until their 20s.
3. Self-driving cars are Slowly Becoming a Reality, and they will impact Premiums
Self-driving cars are finally stepping out of the domain of science fiction and entering our lives. As a result, car insurance premiums will get a shake-up. Autonomous vehicles will be able to react quickly to road conditions, meaning fewer accidents and much lower risk for insurers.
It will be interesting to see how long it takes for self-driving cars to be adopted. We could see mass adoption in the next 50 years. It all depends on how quickly the technology can be made affordable. While this may be several decades away, savvy insurance groups are already discussing what policies might look like when that day arrives.
4. Usage-Based Insurance is Becoming More Popular as it Offers Discounts for Good Drivers
Drivers who obey the rules of the road will soon be rewarded. Usage-based insurance (UBI) is gaining traction, and roads are becoming safer. UBI rewards conscientious drivers who drive less often, more safely, and more economically by offering discounts on their insurance premiums. It’s a win-win: those who follow the rules save money. At the same time, other drivers benefit from having them out there, staying alert, and keeping the world spinning smoothly.
While the adoption of UBI may be a little slow nationally, surveys have shown that drivers find them more favorable than in the past. This trend will continue to grow over the next decade, and we’ll see mass adoption by the public.
5. Insurance Companies are Increasingly Using Data to Customize Rates and Coverage
Insurance companies are raising the bar when it comes to personalization and customization. With the use of technology and data, they can now tailor rates and coverage to fit a customer’s individual needs, often resulting in competitive prices that give those customers more bang for their buck. In addition, smart connected cars and the data they generate are also helping insurance companies detect insurance fraud easier. At the same time, some states are introducing legislation limiting the types of data that insurance companies can collect.
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