Not Driving Much These Days? Maybe Your Insurance Company Will Give You a Break!
Most of us are not driving very much these days. Personally, I have
Auto insurance is too expensive. It is time to challenge the insurance companies. New policies that better reflect the actual risks and costs, along with new technologies, can make rates more reasonable for the policyholder. That’s what we are putting together. Everyone agrees that auto insurance is necessary but expensive. We can fix that!
A bit more information on how this website came to be is here. A few articles on how we would like to change the auto insurance biz are located here.
A Few Figures
Overall, the average cost of an accident is approximately $11,250. According to Polygennius.com. Using the above figures, the annual cost of accidents approximately $67.5 billion. Total amount paid in by 225 million drivers equals $339 billion.
That leaves $271.5 billion in gross income for the insurance industry.
This does not include rarely driven vehicles. This assumes one insured automobile per licensed driver, which is low considering that most licensed drivers have more than one vehicle.
Seems like there is room to make rates more reasonable. Detailed studies of the auto insurance industry have shown that miles driven has a very significant effect on accident rates. Many of these studies are over 20 years old.
Many of us have vehicles that we rarely drive. We pay full coverage on all of them with no discount for low miles driven.
That leaves $271.5 billion in gross income for the insurance industry.
This does not include vehicles that are rarely driven but assumes one insured automobile per licensed driver, which is low considering that most licensed drivers have more than one vehicle.
Seems like there is room to make rates more reasonable.
Detailed studies of the auto insurance industry have shown that miles driven has a very
significant effect on accident rates. Many of these studies are over 20 years old.
Many of us have vehicles that are driven very little, yet we pay full coverage on all of them with no discount for low miles driven.
The insurance industry is now using a driving tool called a telemetry, or telematic, device. Supposedly, they help you save money based on how you drive and how much you drive. This device records your miles driven as well as other information. The savings are minimal base on what people have reported online. The number of reports on this new insurance model are in the thousands, and almost none of them are positive!
For initial tests, the telemetry devices are installed for 30 days. Not only do they record miles driven but also how fast the car would speed up or slow down. At the end of the 30 days, average savings are low or nonexistent because of subtractions to savings from normal driving speed changes, not because of bad driving habits.
The conclusion is insurance companies could reduce prices. More realistic measurements of driving behavior along with more meaningful interpretations of the data will generate more premium reductions.
US Patent – Progressive Insurance
In fact, Progressive Insurance has a patent – now expired – on a device and a system of adjusting auto insurance rates based on how much you drive – US patent # 5,797,134 issued in 1996. I tried one of their telematic devices. My experiences are recorded here.
Telemetry Device Operation Summary
The telemetry devices are programmed to negate any premium reductions achieved by low miles driven. Savings are subtracted every time the automobile speeds up or slows beyond the programmed rates. A bit more information can be found here.
Encouraging Unsafe Habits
If it takes you less than 9 seconds to slow from 60 mph to a full stop, current telemetry devices will penalize the driver.
Some people have reported that the device penalized the driver when the automatic transmission downshifts going up a hill!
The speed change settings are so low that normal maneuvering in traffic will set them off. You may need to brake hard or accelerate to avoid a collision.
Automobiles without the telemetry device installed will generate no savings at all.
THE TELEMETRY DEVICE PROGRAMMING NEEDS CHANGING IN ORDER TO PROVIDE REAL, LASTING INSURANCE PRICING REDUCTIONS.
More information about us available here.
Quick Links
Blog articles are updated several times a week. These are a combination of my own research on auto insurance, cars in general and a few opinions.
Have ideas for an article? Drop me a line at
norman@smartcarinsurance.today
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