We are in exciting times with connected automobiles that help gather valuable information. Plus, large computers that can make sense of it all and turn it into usable information. Hopefully, shortly most of these efforts will result in cheaper auto insurance rates for motorists. They may have to provide something in return like more data but savings they get may make it worth it.
Currently, plenty of information is gathered online and through the Internet of Things. It is sometimes so surprising that you think of something in your head or talk to your friend about it and next thing you know Google delivers adverts related to that topic without you typing anything similar in your computer, as if it is reading your mind or listening in your conversation. This is proof that information can be gathered and turned into actionable data so fast.
How Car Insurance Companies Can Use AI
They are already using it on many areas of their operation. Some are better in this field than others but they are getting there. For example, machine learning is successfully used in claim handling from the very start to the final conclusion. Customers can document the damages after an accident like taking pictures and describing the severity and computers can analyze it. They learn it from the previous damage pictures and keep learning to estimate it accurately.
They may be a long way away from it but companies are trying to come up with vehicle insurance quote forms that can take every little detail about your life, driving, car, family and zip code and calculate a premium that is so tightly fit with your risk profile. Once they achieve this goal it will be very good news for some and bad news for others.
How It Could Benefit Motorists
If you are a safe motorist, you will enjoy the benefits of such precision because you want them to know more about your advantages, smart choices and successful living. Luckily, when things are going your way, they keep coming. For example, having a great credit score will help you get a large discount on your vehicle insurance premium.
The opposite is true and it will be hard to hide it when companies can get their hands on most information. In the past, if your credit score was in decline, it took a while affecting your rates for several reasons. The financial problems were slow to show on credit reports and companies didn’t necessarily check that that often either. Now, transactions are almost minute by minute.
Another great use of machine learning is that computers are programmed to detect even the most elaborate insurance scams. Carriers lose billions a year to scammers and stopping them is beneficial for everyone. The more they lose the more they would have to try to recoup from policyholders. They will pass it on one way or another.
The other way around usually takes time. Companies aren’t forthcoming in reducing auto insurance rates because they achieved good savings themselves. Think about it. Gas prices go up pretty quickly when the wholesale petrol prices go up. However, they don’t come down that quickly when the wholesale prices drop. They have to be forced to offer their best rates.
Their competitors can force them by coming up with better and cheaper policies. But the real impact is made by consumers looking for cheaper quotes and therefore shopping through several providers. These days it isn’t hard to do that in the comfort of your home. They are available readily and freely online. All you need to do is spare a little time and check the current state of your insurance costs
Also Read: 7 Mistakes You Should Keep Away With Your Finances
