I have worked in engineering for over 35 years. One thing about engineers is that we love problem-solving, and a good challenge. I ran across an article on pay-as-you-drive auto insurance, or usage base insurance, so I started looking into this further.
Usage - Based Insurance
A few years ago, I ran across an article on usage-based auto insurance (UBI) also known as pay-as you-drive (PAYD). Before I read this eye-opening information, I had suffered along with everyone when it came to owning more than one car or truck. I put the great majority of miles on my small commuter vehicle and little use of the truck. The disparity is striking. Last year I drove the car over 20,000 miles. The truck racked up 1,700. Full coverage is on both vehicles.
No price break on the truck.
New Technology and New Ideas
It makes intuitive sense that when a car stands idle most of the time, the probability of an accident drops significantly. Reduced insurance rates should also drop. Rarely does this happen!
I ran across an article about Progressive Insurance’s Snapchat device and the system behind it. Come to find out, this company patented their system in 1996! Since then, several other companies have done similar things. The market penetration for Usage Based Insurance is less than 10%. I started digging.
Auto Insurance Biz Likes Things As They Are
The understanding I arrived at was that the auto insurance industry does not want to offer a fairly priced UBI product. Article after article I read showed significantly lower premiums when using UBI policy features. The insurance guys like things as they are.
My conclusion: Change will have to come from a business outside the auto insurance industry. Now I am putting together a startup to address the many areas of current auto insurance policies that need updating.
General Details of New Insurance Policy
This short video will provide a good summary of what we have in mind. More details further on down the page.
- Discounts for each year of accident-free driving
- No rate increase if someone hits you. Increasing your rates following an accident that was not your fault is a common practice with many insurance companies.
- The telemetry device will record miles driven on each car you insure.
- Payment options to include a monthly subscription-type service – you pay for what you use. Most of us pay several months in advance.
- Monitoring your driving information controlled by you, the customer. Miles driven is the key bit of information. This is your account. You control it!
- The ability to add features like acceleration and speed monitoring for young drivers.
- If you want the data sent to you via the internet or cell phone, both, neither, the Cloud, etc. These are your choices.
- You decide what telemetry information you share with the insurance company.
Questions? Send it to us here!