Insurance rating company A.M. Best recently released a white paper that discussed potential upcoming changes to various insurance policies which may be brought on by new technology, progressive thinking, and increased sophistication in insurance companies’ abilities to analyze data.
Many of these anticipated changes could affect the way your auto insurance policy works over the next few decades. Here are some of the most interesting changes, some of which you may not see for a while and some of which you may already have.
- Electronic policy documents. States are increasingly changing their regulations as they relate to how insurance policy holders may provide proof of auto insurance coverage. Many now allow policyholders to use their Smartphones to access proof of their insurance coverage from their auto insurance carrier. In some states, insurance policyholders can use their Smartphone when pulled over and in others, when registering their vehicle. This may seem like a minor change, but to tens of thousands of insurance customers who forget to change their insurance card each time their policy is automatically renewed, it will be a tremendous timesaver.
- Social media may be used for underwriting and claims processing. Moral turpitude is already considered when underwriting certain insurance policies. With the prevalence of Internet networking and information sharing, insurers could eventually rely on the discussions and disclosures made on social media websites such as Facebook and Twitter to evaluate the potential risks created by an applicant for auto insurance. While social media does not yet have a bearing on the rates you might be charged for auto insurance coverage, don't be surprised if it starts to factor in at least a little bit; when investigating claims brought by policyholders, insurance companies have already begun going through social media accounts in order to identify potential instances of fraudulent and inflated claims, a fact that was reported by the Sun Sentinel last year.
- Introduction of new insurance products. Between technology helping gain a better understanding of consumer needs and changing the vehicles that we drive, insurance companies may eventually develop new products. Before introducing them to the wider market, A.M. Best anticipates that auto insurers and others will likely test the products after seeking certain regulatory approval. This means it may be a long while before you see the products integrated into the current pool of offerings.
- Price optimization through telematics. Telelmatics is the process of transmitting and storing information over long distances. Telematics can already be seen in the driver-data-gathering electronic sensors that some insurance companies are utilizing to help optimize the premium price a driver is charged. Because this data is a more exacting way for an insurance company to predict the risk that an individual driver brings, A.M. Best expects that it will be increasingly relied on over the coming years. Even better, it will help ensure that your rates are more based on your individual driving habits than homogenized statistics.
- Increased reliance on auto insurance agents. One might think that an increase in technological advances and use of social media for pricing, claims and marketing might mean that consumers will have a decreased need for insurance agents, but the opposite is true. As the auto insurance industry evolves, consumers will come to rely even more on their agents to help them navigate the changes and select the policies and options that are most powerful for them. That makes it even more vital that you find an auto insurance agent who is ready to grow with you and the industry. When selecting an agent, find one who is open and enjoys sharing knowledge with his clients. Additionally, search for an agent who has a wide range of insurers that she works with. That way you know that you will be given access to the best rates and policy options, rather than just the rates income policy options of a single insurer.
We would love to help you discover how Worcester auto insurance policy changes over the years will affect you and your family. Give Knight-Dik Insurance Agency a call at 800-286-6353 to start working with one of our experienced agents today and we’ll help your policy keep pace with all the progress being made in the industry.