Your car insurance premium is determined by the make and model of your vehicle and the claim statistics for that particular model. It may appear to be a discrimination, but most of the times, people are unaware of the procedures involved with the purchase of an auto insurance policy. With IOT spreading its wings to engulf every area of productivity, the same can be coupled with insurance to widen their portfolio of financial services and revamp their insurance value chain.
Connected car technology
Even though modern cars use advanced electronic systems that control a wide range of functions, they still remain unconnected from each other while on road. However, in an attempt to draw parallels with the connectivity systems employed by airplanes, some manufacturers have begun the research of advanced connectivity options in cars as well. If implemented, it can have positive implications on the insurance industry as whole. At present the car connectivity is limited to basic functionalities such as real time navigation and the like. But with embedded connectivity in cars, the quantum of data generated will be so high that it can be collated, processed, and harnessed for a wide range of purposes including auto insurance. Such connected systems can give deeper insights about the driving patterns of the car owner, which can be used for risk-based pricing and preventing fraudulent claims. The Indian automobile market expects the launch of these advanced cars by the year 2020.
When vehicles are fitted with latest technology units, the area of dynamics, navigation, and other value-added services get a giant push. Connected cars will not only set up new business models but will simultaneously enhance passenger safety and develop effective pricing methods. For example, during high speeds, the system will alert the driver about the same and give relevant safety instructions. Let's take a second instance where the driver and passengers require roadside assistance. In this case, they can engage the IoT system to send signals to the insurer for emergency services. Also, enhancing the transport domain with IoT will trigger fuel savings through advice based services. You can also avoid unplanned servicing and repairs with the performance tracking system fitted in your vehicle. Additionally, you will have access to information such as weather conditions, fuel stations, restaurants, danger zones, etc.