OAI: Expansion of Usage-Based Auto Insurance Shows Value of Driver Data

    RANCHO CUCAMONGA, CA, December 20, 2011 /24-7PressRelease/ -- The news that The Hartford is joining the ranks of auto insurers offering policyholders a shot at discounts if they're willing to outfit their vehicles with devices that track mileage and driving habits shows that collecting more precise driving data can pay off for both sides, according to Online Auto Insurance (OAI).

The trend is good news for coverage providers who no longer need to rely on policyholder "guesstimates," instead getting info relayed directly from the vehicle. And it can be good news for consumers looking for a break on their no down payment auto insurance or other types of policies--if the data shows they deserve a discount.

The Hartford's TrueLane program--which officials expect to kick off early next year--will monitor driving habits and reward customers for safe driving and low mileage. A device will capture information including how fast and how far the vehicle is driven, plus the manner of acceleration, braking and other driver actions.

TrueLane puts the company among a growing number of providers nationwide--including giants such as Progressive, Allstate and State Farm--with programs that monitor vehicle use electronically and offer rewards for policyholders who log few miles and display safe driving habits.

As the Insurance Information Institute has pointed out, tracking mileage and driving records to help set policy rates is far from new. Even some state governments have included usage-based coverage options in their long-term plans for reducing pollution, with the rationale being that they provide sufficient incentive for motorists to drive less.

Source: http://www.mass.gov/eea/docs/eea/energy/2020-clean-energy-plan.pdf

But in addition to having the potential to benefit consumers and the environment, the ability to retrieve driver data electronically gives coverage providers a big leg up.

Instead of relying on self-reported information from drivers about mileage and other factors that can affect premiums, insurers have accurate data delivered to them.

And because that makes it far easier for insurers to calculate the risk they are taking on by renewing a policy, most of the companies taking part in those programs offer discounted coverage.

To learn more about this and other safety and insurance issues, readers can go to http://www.onlineautoinsurance.com/pay-monthly/ where they will find informative resource pages and a rate-comparison generator that can help drivers in any state evaluate their coverage options.

# # #