Telematics Update: Capture New Market Share with Undocumented Workers

telematicsThe debate over whether or not to grant drivers’ licenses to undocumented workers is famously heated. In fact, we’ve explored the politics and opportunities involved in licensing undocumented workers before.

Opponents assert the need to enforce immigration laws, and they reject the notion that those who’ve come here illegally should be allowed to participate in society. Proponents point out that the labor immigrants perform is essential to our economy, and that it would be inhumane to deprive them of necessities such as driving, renting a home and managing their finances. Allowing undocumented workers to obtain drivers’ licenses also stands to make the roads safer and enlarge the customer market for insurance.

What do states currently allow? The following summaries come from Numbers USA.

  • In most states, immigrants must prove they’re here legally before they can obtain a license, which is synced to expire with their visa (or other authorization document).
  • In Oregon, Alaska, Nebraska, New York and much of New England, there are loopholes, and drivers licenses and visa expiration dates aren’t synced.
  • In Utah, immigrants don’t have to prove they’re here legally, but drivers licenses and visa expiration dates are synced.
  • In Washington, California, Nevada, Colorado, New Mexico, Vermont and Maryland, immigrants don’t have to prove they’re here legally, and expiration dates are not synced.

Could telematics provide a fit for immigrant drivers?

In states where undocumented workers can obtain a license, telematics offers a way to obtain affordable insurance as well. It’s particularly suited to the needs of this largely low-income, and often unbanked pool, because it gives policyholders the ability to adjust what they pay by how they drive.

In so doing, it empowers insurers to attract a flood of new customers (1.4 million in California alone, for example) who are eager to integrate with society as soon as possible.

Should undocumented workers be licensed? That’s a question we’ll leave to the legislators. Once licensed, how should they be insured? There, we can offer some insight: by telematics, most definitely.

To learn more about how auto insurers can capture underserved market, download our “Survive and Thrive” report.

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