Apple and Google may be household names in the online and in the mobile space, but both could soon be making a splash in the car insurance industry. As reported by the Chicago Tribune on December 22, 2014, Apple and Google look to shake up the way insurance companies keep a watchful eye on drivers while they’re behind the wheel.
Today most of the big insurance companies offer their customers the opportunity to enroll in driver-monitoring programs. In return for letting your insurance company monitor your driving habits when you’re behind the wheel, you’ll receive a discount off your insurance premiums. Insurance companies currently use expensive devices that plug into the dashboards of cars, but that could soon change.
Usage-based insurance programs are quickly picking up steam. Leading the charge in that realm are Apple and Google. Instead of insurance companies investing heavily in plug-in devices, phone apps would help cut much of the overhead cost and reshape how these programs are delivered.
Shaking Up the Insurance Industry
The entry of Apple and Google has the potential to shake up the property and casualty insurance industry. Up until now, the industry has gathered its own loss information, opting to keep the information in-house.
Smartphone apps would help reduce some of the anxiety drivers have about joining driver-monitoring programs. Although more people have warmed up to the idea of letting our insurance companies keep a close eye on our driver habits, there are still many people out there who feel it’s a little too close for comfort.
Apple and Google have an advantage that’s hard to compete with. Both are already so closely intertwined with our lives, that it wouldn’t be a big stretch to see us sharing our driver habits with them.
How will Apple and Google handle this useful driving data? That’s the million-dollar question. Will it make insurance companies pay for the data? This has the potential to downplay the importance of underwriting criteria the insurance industry has relied on so heavily for so many years.
Driver-Monitoring in New Cars
Phone apps solve another problem that is plaguing the auto insurance industry: how to get motorists to adopt driver-monitoring technology. One school of thought is for car manufacturers to install it on new cars. While this may seem like a good approach, it will take many years to implement, since they’ll be plenty of motorists driving around in older models. Smartphone technology will help speed up the process.
Although plug-in devices may have the advantage over phone apps, that could soon change. As our smartphones become more intelligent, it’s only a matter of time before our phones surpass plug-in devices. Rather than investing in plug-in devices that eventually become outdated and obsolete, Apple and Google will be able to continually improve their phone apps and be at the cutting edge of technology for the years to come.