The usage-based insurance market will continue growing in importance amid the pandemic - Business Insider

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The pandemic is driving the need for alternative insurance models to replace conventional policies, increasing the importance of usage-based insurance

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The coronavirus pandemic is driving the need for alternative insurance models to replace conventional policies. In response to consumers driving less due to lockdown restrictions, many auto insurers had to compensate their customers: Liberty Mutual While this is a quick fix for the issue, the long-lasting effects of the pandemic will create a new normal where jobs will become more flexible, leading to more inconsistent driving habits.

To develop such an offering, insurers need to consider what kind of data they want to collect and which IoT devices they'll use to do so. Insurers should take behavioral factors into consideration and price policies according to mileage. Insurers can either focus on driving behavior to price customers' risk based on how safe they're driving, or price policies by how many miles users are driving. However, they can get the best UBI result when combining both these methods to include both safety and mileage in their pricing models.

They can use smartphones or external IoT devices to collect data, but connecting directly to the vehicle will be a game changer in the industry. Insurers typically either collect data with a user's smartphone — which, while easy to set up, has come for not always correctly collecting data — or an IoT device that connects to the OBD-II port of a vehicle. Insurers have to provide the latter device, but it also records data more accurately.

 

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The insurance industry is still about as honest as a politician. Lmao

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