If you live in the United States and drive a car than you have some familiarity with car insurance. After all, it’s illegal to drive without it. Depending on where you live, that monthly cost can have a real financial toll. As a result, many people are taking advantage of a discount offered by many popular insurers. The catch, you have to attach a device to your car that measures your driving habits. If you drive in a manner that the insurer deems safe, you get a discount. If not, you may find your auto-insurance rates rising even more.
So, is it worth it to allow your insurer to measure your driving habits? In short, maybe. The reality is that the future of insurance is going to look more like this. As artificial intelligence (AI) becomes more mainstream, insurers are going to rely on a massive influx of data to make more personalized insurance policies. They’ll use all of your connected devices to gather that data. Insurers are even looking at social media accounts to try to glean insights into the lifestyles of their customers.
In the past, consumers were angry when they found out that insurers were buying data from pharmacies to inform life insurance policies. This same thing is already happening with digital data gathered from smart devices.
Understanding the inevitability of this shift into big data, it makes sense to become an early adopter with devices like the ones you can put on your car. Yes, it may seem like a privacy violation, but if you’re a safe driver, why not save money on your car insurance premiums every month.
New technology is fundamentally changing the way insurance companies run, but it is the epitome of a double-edged sword. AI is allowing quotes to become more personalized, and data driven. It’s even having a substantial impact on the speed at which insurers can process and pay out claims. However, that insight is allowing insurers unprecedented access to the personal details of peoples lives, and how they are utilizing those details to determine costs is a rather opaque process for most people.
The New York Times recently published an article addressing this very issue. The articles author, Sarah Jeong, summed it up best when she wrote:
“Artificial intelligence, in all its variations, holds great promise. The automated processing of car accident photos or machine reading of medical scans can help cut down costs, and even save lives. But the opacity around many applications of automation and artificial intelligence are reason for pause. Not only do people have limited access to the code that determines key facets of their lives, but the bar to understanding the “reasoning” of algorithms and data sets is high. It will get higher as more industries begin to use sophisticated technologies like deep learning.”
All of that is a very long winded way of saying that, yes, if you are trying to lower your monthly car-insurance payments attaching a device that measures your driving habits to your vehicle is a very valid option. Of course, if you’re not a great driver, you may want to think twice.