Memory isn’t a concrete thing. It’s pliable. Even if you experience an event directly, as soon as you tell the story, the original version of events is just slightly altered. You experience it all over again, this time with new feelings, new thoughts, which causes the story to shift a little every time you remember it. Most of the time, the flexible nature of memory isn’t much of a problem. But when a collision occurs, it’s kind of important to remember the details correctly.
What a psychologist observed about eyewitness crash accounts
“Psychologist Elizabeth Loftus has been particularly concerned with how subsequent information can affect an eyewitness’s account of an event,” said Saul McLeod at Simply Psychology. A witness’s memory can be affected simply by the way a question is phrased, and when exposed to new ideas about something they’ve seen, those ideas become a filter through which they reinterpret their experience.
Loftus helped established this fact back in 1974 with a study called “Reconstruction of an Automobile Destruction.” In her first experiment, participants watched videos of cars crashing, then were questioned on how fast the cars had been going. Different respondents were asked in different words, and the wording directly influenced their answers:
- “How fast were they going when they smashed?” 40.8mph
- “When they collided?” 39.3mph
- “Bumped?” 38.1mph
- “Hit?” 34mph
- “Contacted?” 31.8mph
The difference of one word altered eyewitness estimates by as much as 9mph.
In another experiment, participants were questioned a week after the fact on whether or not they had seen broken glass in the videos. Those in the first group, who had heard the collision described with the word “smash,” were 2-3 times more likely to say they had seen broken glass than those who’d heard it described with the word “hit.” There was no broken glass in the film.
Point being, when people receive information after an event has taken place, it can put a spin on their memory. It can even alter their perception of the original event, causing them to “remember” things that never happened. For insurers processing a claim, that’s a problem.
How to eliminate human error in crash reconstruction?
The only way to eliminate human error is to get your data from something other than a human. Photos, in other words, don’t lie. Neither does insurance telematics data.
In this mobile era, photos are easy to come by. Insureds are generally eager to document accident scenes by using the handheld cameras they carry with them at all times: their smartphones. As for geolocation, velocity and the like, that’s easy to come by, too. Smartphone telematics can be called upon to report just what the conditions were when an incident occurred. That’s valuable information for claims.
How to ensure accuracy in crash reconstruction? Don’t just ask the drivers involved. Ask their smartphones. Click here to learn the many ways smartphone telematics can help your organization perform smarter.
When the National Highway Traffic Safety Administration joined forces with Virginia Tech, the Virginia DOT and the Virginia Research Council to figure out why drivers crash, the results came in pretty clear.
This was the first large-scale study conducted with the goal of collecting pre-crash and near-crash data. It followed over 240 drivers of all ages, both male and female, for a year or more. The conditions were normal: no experimenters were present, the driving was general-purpose, no special instructions were given, and the means of data collection was unobtrusive.
In two million miles and more than 42 thousand hours of driving data, there were 82 crashes, 761 near-crashes (“situations requiring a rapid, severe evasive maneuver”) and 8,295 incidents (like a near-crash, but less urgent). As to why these incidents occurred, some very clear patterns emerged.
What do drivers who crash have in common?
- They’re not paying attention. Be they fatigued, distracted or simply looking the wrong way at the wrong time, inattentive drivers were involved in 80 percent of the crashes recorded.
- They’re young. “The rate of inattention-related crash and near-crash events decreased dramatically with age, with the rate being as much as four times higher for the 18- to 20-year-old age group relative to the other groups (i.e., 35+ years),” the report said.
- They’re tired. Fatigue was a factor in 20 percent of all crashes, and in 16 percent of all near-crashes. Those numbers are significant, as most databases name fatigue as the culprit in only 10 percent of the collisions they track.
What about self-driving cars?
Interestingly, autonomous vehicles seem to crash five times more often than regular cars, Fortune said. But it’s not the computer’s fault. The self-driving cars studied didn’t cause any of the crashes – they were, rather, crashed into.
Another interesting point: while passengers in the self-driving cars were four times as likely to get injured, these injuries were less severe than what’s normal for passengers in conventional cars. And there were no fatalities, none.
But let’s not get too excited yet. The cars in question were few in number: Only 50 cars were analyzed. Weigh that against the 269 million regular vehicles on the road, and it’s easy to imagine how that imbalance might skew the results.
How to lower the crash rate?
Whether we’re talking conventional or self-driven cars, human inattention seems to be the problem. Let’s look at how smartphone insurance telematics can potentially address the hazard of inattentiveness in the future.
- Remind drivers to pay attention. Your smartphone telematics app should be designed to track, evaluate and give safety feedback to the driver if it detects signs of distracted driving.
- Collect data to help you include distracted driving as part of your rating algorithm. If your app is designed to detect signs of inattentiveness, it’s only a matter of time before you have data on this risk exposure, which could in turn be used to enhance risk selection and pricing.
- Reward drivers for their attentiveness. Those who drive safely and steadily can be rewarded with a lower premium, encouraging smartphone messages, and a more satisfying driver score.
Want to know more about how Driveway’s insurance telematics app could help your policyholders reduce the frequency of crashes? Request a pilot.
Traffic is moving quickly on a winding two-lane highway. Then, you take a corner and face a wall of red lights. You slam on the brakes just in time – but the driver behind you isn’t so fast. When you get out to inspect the damage, you try to see what caused the pileup: There’s no deer in the road. No accident. No, this time, the collision was caused by a speed camera.
Speed cameras: good idea, dodgy results
The purpose of speed cameras is safety. Everyone is safer when drivers travel within the speed limit. To enforce those limits, States throughout the U.S. use speed cameras to crack down on drivers who go too fast.
There’s a problem, though. While the cameras do ticket those who aren’t obeying the limit, writing tickets isn’t their goal. Safety is. And as long as the sight of the camera causes braking blackspots – where a line of drivers punches the brakes for fear of getting a ticket – they undermine their own objective.
There are political problems, too
“In almost every jurisdiction, the impetus and decision to install photo enforcement comes from politicians and law enforcement, and not from traffic safety engineers or as a result of traffic engineering studies,” said an anti-photo enforcement movement in Arizona. What followed this statement is a long list of recent fatalities and collisions linked to speed cameras.
Arizona isn’t the only State with an anti-photo enforcement movement. Public opinion on the tactic is overwhelmingly negative. “Photo enforcement has been placed to a popular vote in many US communities and the public has rejected cameras the large majority of the time,” said Maryland Drivers Alliance. There are many complaints, from anger at mass surveillance to the fact that drivers ticketed by a camera can’t exercise their right to face their accuser in court.
Driving safety remains a serious issue
In a recent report, the telematics analysis firm Wunelli (a LexisNexis company) revealed that when speed cameras are visible, hard braking is six times more likely on average. In some locations, it’s 11 times more likely.
What’s a hard braking event? When a driver drops at least 6.5mph in one second, they’re braking hard. If you’ve got a bag sitting on your passenger seat when you change speed like that, it’ll end up on the floor.
The conclusion seems clear. Speed cameras incite “poor driver behavior,” according to the founding director of Wunelli, Paul Stacy. “These findings really put into question the value of speed cameras as a road safety tool,” he said. That assertion is only underscored by what happens after drivers pass (hopefully unscathed) through a braking blackspot. Is it any surprise? They speed up again.
There’s a better way to achieve road safety
Despite the stated purpose behind speed cameras – making the roads safer – it seems that all they really accomplish is issuing the occasional ticket while making the roads more dangerous. There are better approaches. Drivers who use insurance telematics, for example, have an incentive to eliminate speeding as well as hard braking. Safer drivers get better premiums. Instead of wielding a stick, we can offer a carrot.
As it turns out, safety is a carrot in its own right. Drivers in a 2015 LexisNexis study demonstrated that the discount is less of a draw than the opportunity to become a safer driver. Insurance telematics can deliver that via smartphone app, engaging drivers every time they get behind the wheel with driver coaching and scoring.
The result? Fewer tickets, fewer collisions, fewer claims. Roads are safer. Drivers get a product they want. And insurers have the opportunity to strengthen customer glue with frequent communication and improved customer satisfaction. Sounds better than a speed camera, don’t you think?
How much can a teen driver expect to pay for car insurance? The short answer is MORE. As every insurer knows, teens are a high-risk demographic. Young drivers are less experienced, more impulsive and more likely to engage in risky behaviors like texting and driving. Those first six months behind the wheel is an especially dangerous time.
But how much more, exactly, can they expect to pay? In the case of 19-year-old Cameron Sottile, the answer was a shocking six grand.
Let’s be clear: Cameron has a clean driving record, and his vehicle is 11 years old. Even so, as a young man living in Scarborough (Canada’s most expensive insurance market), in his family he represents a difference of thousands of dollars per year.
Cameron’s father wasn’t prepared to accept that answer, so a hunt ensued. “He contacted 40 insurance companies and brokers,” said the Toronto Star. “He also used websites that compare insurance rates.”
In the end, Cameron’s family was able to insure their family vehicles for $1,783 each, or $6,172 altogether. That’s a high premium for where they live, but close enough to the average to be acceptable. And it’s a lot better than some of the quotes they received, which ranged as high as $32,000.
After reporting on this story, the Star concluded that shopping insurers is a very good idea. It also concluded that there’s “no way around the high cost of insuring a young, male driver with his own vehicle.”
Well, that’s where we beg to differ.
If insurers limit themselves to conventional premiums calculated on preexisting algorithms, the Star’s conclusion is correct. Some insurers will do a better job than others of appealing to young male drivers with relatively competitive rates, but for the most part, they’ll be confined to offering a deal that’s stacked against the customer. That’s the nature of the teenage risk profile.
For insurers who expand their offerings to include PHYD telematics, however, there’s a better deal on the table. A driver like Cameron with no tickets or accidents on his record could get a much better price through usage based insurance.
Even the Star acknowledges that usage based insurance can save insureds 10 to 25 percent on the cost of a policy. Cameron’s father is looking into it. He’s not the only one, either: According to a Towers Watson survey released last summer, younger drivers “are leading the charge for usage-based insurance,” with millennials ranking “most enthusiastic about buying UBI” because they “believe it’s a better way to calculate premiums.”
“The buying behaviors and expectations of this rising demographic will require a complete rethink by both auto insurers and car manufacturers,” Towers Watson said.
For families like Cameron’s, usage based insurance makes a lot of sense. And it doesn’t require a lot of footwork spent on shopping rates, either. Why penalize a family of good drivers with that kind of hassle when there’s a more straightforward solution? Why not reach out to them instead with an auto insurance offer tailored to their needs? Learn more about how smartphone UBI works for drivers here.
How important are millennials to your business? “Gen Y is the only generation of auto insurance customers that is growing,” said Mark Garrett at JD Power. “It’s critical that providers continue to focus on those younger generations as they are the future of their business.”
And, when it comes to claim satisfaction, millennials are hard to please. There’s good news, though. According to the 2015 Claims Satisfaction Study that JD Powers released last month, claimants born between 1977 and 1994 moved up a few points on the satisfaction scale. In 2014, they measured 819 out of a thousand. This year, they’re at 827.
Small gain? Maybe, but any amount of progress is encouraging when you’re talking about a generation whose satisfaction with claims measures well below that of any other age group.
Last year, for example, Gen X claimants measured 847 in satisfaction. Their number is even higher now, but even taking the less rosy score, Gen X drivers still show more satisfaction than Gen Y drivers do now after getting a little happier in 2015. And Gen Y satisfaction can’t hold a candle to Pre-Boomers (those born before 1947), whose satisfaction is practically sky-bound, hovering around the 900 mark.
The millennial riddle … how to increase claims satisfaction?
1. Communication. JD Powers observed that the gains in satisfaction between this year and last had to do with how well insurers explained the claims process and kept drivers informed. Drivers who chose to receive electronic updates via email, text or website scored higher satisfaction than those who didn’t. Of Gen Y claimants, almost half (42 percent) opted in.
TAKEAWAY. Communicate with your policyholders frequently throughout the claims process. Send emails or ping them via smartphone to let them know what the next step will be.
2. Technology. Gen Y drivers who submitted pics via mobile app (17 percent) were more satisfied … a lot more. They logged a star-scraping 850 compared to only 823 from those who didn’t submit photos. Gen Y was the most likely age group to use technology in this way.
TAKEAWAY. Make it easy for claimants to submit photos through a mobile device, so they’ll have a way to document damages whenever and wherever they occur.
3. Expectations. One of the biggest contributors to dissatisfaction was how long it took from commitment to delivery: how many days pass before a driver receives funds once their insurer has agreed to pay a certain amount? Most drivers wait seven days to find out what their policy will cover. Then they wait an additional 19-20 days to get the money.
The timeframe isn’t necessarily the problem here: it’s the expectations. When insurers don’t manage expectations, 62 percent of claimants think the wait is going to be shorter than it is. When claimants find out they’re wrong, their satisfaction drops.
TAKEAWAY. Tell claimants what to expect. As soon as a policyholder makes a claim, send a message to let them know how long you’ll take to get back to them with what their policy will cover. When you do get back to them, tell them how long it will take before the payment is received.
Harness mobile technology to improve communication with claimants.
For each of the three points above, insurers in the best position to improve millennial claims satisfaction are those who use smartphone technology to communicate, receive pics and touch base with frequent, friendly messages. That’s an important component to millennial satisfaction – and as JD Powers pointed out, millennial satisfaction is paramount.
Interestingly, your smartphone telematics app could serve as a portal for many of these service features. Learn more about smartphone telematics for insurers or download our fact sheet.
Smart cars have already started infiltrating the roads, and rumor has it, they’re going to become more and more common as time goes on. But until you take the leap and upgrade to a car that drives itself, how about souping up the ride you’ve got now with these sleek mobile apps?
Here are our picks:
- Waze. Get turn-by-turn navigation – plus real-time data on traffic jams, road hazards, accidents and speed traps, all generated by other app users. Go the extra mile, and use Waze to share what the road looks like to you too!
- greenMeter. You probably know your fuel economy suffers when you drive too fast. But it doesn’t really hit home till you see how much it’s costing you. Get real-time metrics on your driving, so you can adjust your use of the accelerator and brake pedal to get the most from your gas tank.
- GasBuddy. Speaking of gas, where’s the cheapest pump? Without this app, you’re stuck with the choices you can see from where you sit. With it, though, you can find the cheapest gas within any zip code. Prices are posted by users; post a price, and you could win a prize!
- Carticipate. If you want to go further in softening your carbon footprint, but you’re not interested in signing up for a ride-sharing service, how about tapping into a social network through your mobile device? Carticipate lets you find ride-shares anywhere in the US, and around the world.
- Automatic. Your check engine light is on. Instead of ignoring it and hoping for the best, plug the wireless peripheral from Automatic into your car’s OBD, and get back a treasure trove of diagnostic data.
- RepairPal. When your diagnostic app finds trouble, where do you go? This app logs your car’s repair history, estimates the cost of upcoming repairs, shops parts online and recommends the best garages in your area.
- Roadside America. Road trips are best when you don’t plan them out. With this app, you can spontaneously “wing it” across the U.S. with a stream of local data about the weird museums, amazing hot springs and other peculiar destinations you’re about to drive past.
- Auto Guard. As long as you’re on that road trip, why not record it with a dash cam? Capture the bizarre and beautiful moments you just could never have seen coming. While you’re at it, protect yourself from bad drivers and undeserved tickets, too.
- Honk. If you forgot where you parked, don’t worry: Honk’s got your back. Drop a pin on the map and take a picture so you’ll be able to find your wheels later. This app also lets you keep voice and text memos … and it tracks your parking meter time, too.
- Driveway. So you think you can drive? It’s time to put your ego to the test and score your skills with the smartphone insurance app that rates your driving, helps you to hone your skills and rewards you with lower insurance rates as you improve.
Ask a group of parents if they’re anxious about their teen sons or daughters, and you’re guaranteed to hear a “yes.” Ask them what their main concern is, and they’ll probably answer drugs and alcohol. That’s what a recent National Safety Council survey found.
Substance abuse aside, parents’ top worries include “bullying, Internet safety, teen pregnancy and school shootings,” said Christie Boyden at Property Casualty 360. It’s good that parents are thinking about those risks. Problem is? The greatest threat to teen safety isn’t even on that list.
76 percent of parents don’t know that collisions are the biggest threat to teen safety. They also aren’t thinking of insurance telematics as a potential solution … yet.
“Only 24% of parents identified hazardous driving or car crashes as their biggest safety concern for children ages 15-19,” Boyden said. The National Safety Council calls that a problem.
According to Deborah Hersman, CEO of the NSC, for years statistics have shown that “the first year of driving is a particularly deadly time in a teen’s life.” In 2013, for example, deaths in the 15-24 age group due to car accidents outnumbered all non-transportation accidents combined.
When parents consider UBI for their teens, they’re thinking discounts.
Clearly, teens are a high-risk demographic. And in the auto insurance industry, high risk translates to higher premiums – a fact of which parents are well aware. By starting their newly-licensed son or daughter with usage-based insurance, parents who foot the bill could save 10 to 30 percent.
That’s a popular reason to connect the dots between teens and UBI. But it’s not the reason insurers should be leading with.
What parents should be thinking about is education.
Insurance telematics offers a tremendous opportunity to partner with young, inexperienced drivers, score their skills, provide driver coaching and ultimately make them safer on the road.
That’s a desirable package for teens, since the benefits are delivered via smartphone app. It’s also a better way to market smartphone telematics in general – focusing on increased safety rather than decreased rates.
Parents know they can’t go everywhere with their kids, like an angel on their shoulder, whispering into their ear (or shouting!) to keep them safe. But their kids’ smartphones can. Smartphone telematics offers complete engagement with new drivers and ongoing driver education.
Partner with parents to educate teens, and expand your market share.
We encourage insurers to make a special effort to reach out to parents. Present your offerings not just as a commodity to be bought or sold, but as a cooperative, ongoing relationship through which your offerings can equip their kids with the skills they need to survive the most dangerous risk they’re up against.
While you’re at it, check out our recent whitepaper to learn how you can appeal to parents of teenage drivers through ancillary services like driving reports, curfews and geo-fencing alerts – not only differentiating your brand, but introducing new revenue streams at the same time.
In a recent article, Patrick McGreevy, a contact reporter at the LA Times, said that giving migrant workers access to drivers’ licenses may result in more insured drivers. Translation? A huge infusion of new customers into a very competitive market. Let’s take a closer look.
Migrant workers can apply for drivers’ licenses in some areas.
Last January, California started accepting driver’s license applications from immigrants with illegal status. And California isn’t the only State where immigrants can get licensed. There are at least ten other regions with similar programs, including Washington, Illinois and District of Columbia.
Of course, this type of program was (and is) controversial. Advocates say it’ll help integrate immigrants into society while making the roads safer. Critics say it undermines national immigration law and poses security concerns.
But there’s another issue at play here – that’s how programs like California’s will impact the auto insurance market.
Illegal status, legal license: A formula for new customers?
While there’s no data to confirm it, common sense says that if a person has no driver’s license, chances are, they don’t have auto insurance, either. What’s less obvious is whether or not the inverse is also true: will immigrants go looking for auto insurance once they’re licensed to drive?
Assemblyman Luis Alejo, who wrote the law that allows California’s illegal immigrants to get licensed, said he expects “the vast majority” to comply with the law by seeking auto insurance.
That expectation is all the more likely since immigrant drivers are now eligible for a new, low-cost, State-approved insurance plan. But there’s a hitch. “Opponents of the new law … worry that the low-cost insurance plan won’t provide enough coverage for victims in major accidents,” McGreevy said.
Insurance telematics: Possibly the ideal insurance product for immigrant drivers.
One of the strengths of usage based insurance is its affordability. In fact, it may well be that usage based insurance offers a better value than the state-approved plan, offering better coverage for comparable rates.
UBI’s ability to serve low-income demographics is a product feature that we highlighted in a recent whitepaper: “UBI opens the door for those who haven’t been able to afford coverage, by offering reasonable rates that they can lower themselves with modifications to their behavior.” By demonstrating safe driving habits and logging fewer miles if possible, drivers have the power to lower their own premiums.
Immigrants who obtain licenses may be underserved by the traditional insurance model, and possibly by the state-approved plan as well. Could usage based insurance be their solution?
If so: insurers, take note. The California DMV anticipated that 1.4 million people would apply within the first three years in that state alone. In a competitive driver pool, opportunities like this can make a big splash.
Grip tightens. Body temperature rises, heart rate accelerates. Respiration pattern: agitated. Your arm slices the air, a shout! And then – before your wrath can fully unleash – it happens. Gentle music fills the air. You hear a waterfall. There are birds chirping. You are not Bruce Banner. You’re not a caged bull. You’re an agitated driver, and State Farm has plans to calm you down.
Are drivers emotionally-impaired?
It’s no news that impaired driving leads to collisions. Usually when people say “impaired,” they mean drunk. But there are many ways to be impaired: texting behind the wheel, getting distracted by an infotainment system and driving sleepy are three well-documented examples of just how dangerous impaired driving can be.
Could emotion-monitoring be the next big thing?
For insurers, agitated drivers bring yet another opportunity to innovate, and this time, State Farm is eager to be the pioneer. Whereas Progressive led the charge to insurance telematics, State Farm now has a patent pending on its emotion-monitoring system.
“Are you sweating, yelling or waving your arms while you drive?” said Amy Danise at Nerd Wallet. “State Farm’s ’emotion management system’ would use a variety of sensors and cameras to monitor your biometrics,” and if it thought you were angry, to “select and deliver stimuli to change your behavior.”
If State Farm can convince insurance regulators that the data they can collect on driver emotion really does correlate to risk, they may be onto something. Like usage based insurance, emotion detection could offer drivers a way to get lower rates by better-managing their emotions behind the wheel. Insurers who use the technology could offer discounts to early-adopters. They could structure their offerings to reward those who improved their overall risk profile by participating with the program.
Ultimately, it could make the roads safer by working against the road rage trend.
There are some hurdles to jump first.
- Can it be done? Psychologist Robert Nemerovski was skeptical that the system could control for quirks: behavioral differences among individual drivers.
- Would it backfire? Telling an angry person to calm down can have the opposite effect. If you’re ticked off and your car tries to pacify you, would that irritate you even more?
- Is it intrusive? Drivers who are already concerned about privacy in IT would probably find it repugnant to adopt a technology that’s designed to track their emotions.
- Is it cost-prohibitive? Questions remain, including how much would it cost per vehicle, and who would pay. The technology is too young at this point to say for certain.
With any brand-new innovation, it’s difficult to know whether we’re looking at a change soon to sweep the industry – or just a nice idea, bound to fizzle after a little experimentation.
That said, the use of biometrics has already begun to beat a path for many new innovations in the health industry, from wearable devices like FitBit to medical devices for use by doctors. Could emotion-monitoring put a health-related twist on auto insurance, tracking biometrics to make the roads safer? If it did, would you be among the first to try it?
At Driveway, we recommend that you master “movement monitoring” (AKA: insurance telematics) before you attempt “emotion monitoring” (AKA: biometrics). As the old adage goes … walk before you run! Want to know how to insurance telematics can help you grow in a stagnant market? This report will tell you.
With the primary election races well underway, we thought it would be fun to explore the political aspects of auto insurance. Whatever your party, we hope you enjoy this great infographic by CoverHound.