Usage Based Insurance and Privacy: How to Respond to Customers’ Concerns

Usage-Based InsuranceUsage based insurance, a.k.a. pay-as-you-drive, is an intriguing proposition to drivers.

For most drivers, usage based insurance offers plenty of allure: cost savings, extra motivation to drive safely and added incentive for the ecologically-minded to drive less often. But some customers note privacy concerns.

Here are three ways to address privacy to make customers feel more comfortable.

1.  Show them the benefit. Younger consumers have grown up in the digital age and as such, they’ve gotten used to sacrificing a bit of privacy to gain something of value. According to Pew, 81 percent of Millennials are on Facebook and a full 55 percent have posted a “selfie” on a social media site. If they understand that giving up some driving privacy may allow them to earn better rates, and that they may even become better drivers from the feedback they receive, privacy concerns may fall by the wayside.

2.  Be transparent. Track only the data you need, and be straightforward about it. Inform your customers of what you track, where you store it, why you need it and how you protect it. Honesty garners respect, and transparency puts you one step ahead.

In the area of transparency, smartphone UBI delivers a clear advantage over the use of onboard diagnostic devices. With a black box plugged into the dash, consumers have no idea what you’re looking at. With smartphone UBI, they can see every factor measured and how they score.

When marketing and onboarding new customers, be clear about how data will and will not be used. Some consumers may want to know if their information will be given to police or other third parties. Answer these questions clearly and abide by the policies established.

3.  Continue to give them choices. Some drivers love the concept of UBI, and are willing to reveal their habits in order to participate. Others are not – and that’s okay. By providing your customers the information they need to understand their options, and reminding them they’re free to choose whatever is best for them, you relieve concerns and build trust – not to mention brand loyalty.

Be sure your customers understand the benefits that UBI brings. Learn more about how UBI works for drivers here.

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