Are Your Customers Drooling For Usage Based Insurance?
That’s the logic behind usage based insurance or pay as you drive insurance.
The innovation started about a decade ago and has evolved considerably. In fact, many experts predicting that up to 20 percent of all vehicle insurance in the U.S. will incorporate some form of UBI within five years. (source).
What do your customers think about usage based insurance?
The concept of usage based insurance has been generally well received, especially among younger drivers (age 30 and under).
The concept has a basic sense of fairness about it. For a customer, it’s satisfying to know their bill is derived from their own behavior – not from what some massive pool of aggregated data is hypothesizing about a theoretical version of them.
For customers who consider themselves excellent drivers (which is most of us, by the way), there’s the allure of cost-savings too. It’s appealing for drivers to think they can lower their bill by driving less often and being more diligent about observing the rules of the road.
There’s a side-benefit to that. Pay as you drive insurance provides a welcome incentive, for those who think big-picture, to behave in ways that lighten their ecological footprint, and make the roads safer at the same time.
Here are a few interesting statistics, while we’re at it:
• Almost two-thirds of customers surveyed in one study (ages 21-29) said they were willing to give pay as you drive a try.
• In another study, over 35% of respondents viewed usage as the most important factor in setting their insurance premium – while only 19.7% thought their driving history should be the main determinant.
• When provided a guarantee that their current premiums would not increase, one survey found that almost 90% of participants were interesting in switching to a usage-based policy.
Technology moves fast in the insurance industry, and a company’s ability to attract and retain customers depends on staying ahead of the curve. Interested in usage based insurance? Your customers are.
Consider adding usage based insurance your offerings. Click here to download our free report, “10 Reasons to UNPLUG and Unburden Your UBI Program.”