Technology has made its remark in every field which somehow seemed impossible once. Whether its day to day life simplifying gadgets, or reaching Mars, technological advancements has left its imprint in every field. Likewise, with the boom of technology, Telematics and IoT devices has become an indispensable asset to automate industries. Telematics and IoT industry is not limited with keeping attendance records or tracking your resources but has been leaving its mark way beyond that.
Telematics and IoT devices has impacted the automotive insurance industry as well. Many developed countries have adopted Usage Based Insurance; UBI, in short. India is not far behind, insurance companies in collaboration with technology companies is introducing the same here as well. In Insurance industries it is very uncertain to monitor the claim amounts claimed by the customer with accuracy, which raises a question on diagnosis and marking of performance of a vehicle while ensuring to process the right claim amount. Therefore, the introduction of technology which could help to monitor the driving behavior will be a boon for the insurance industry which in turn reduces the burden on both consumer and insurance company.
Clear picture of driving behavior could be helpful for the drivers also since they can be rewarded in the form of better amount offered for no claim bonuses for good driving habits.
Insurance companies installing devices which monitors driving behavior can actually prevent the false accidental claims claimed by the client or its driver. Since usage of these GPS units will allow them to analyze the driving pattern of the driver just before the incident and the drivers can be pointed out on their driving pattern leading to reduction in the amount of claim.
UBI is not something which emerged recently, but was not widely accepted till recent past. Since, there were not many options of cost-effective hardware, auto industries never encouraged users to install such devices in their vehicles. The devices that were available were also bulky and consumed a lot of space on Vehicle dashboard. But thanks to the advancement in technology, new devices are available which are not only cost effective but compact as well.
UBI not only helps to monitor the driving behavior but also promotes good driving habits and timely Vehicle maintenance, which not only reduces the cost incurred by Vehicle Users on unscheduled maintenance and breakdowns but also ensures better customer care services, that is subsequently an important factor while dealing with clients most of the time.
Company could also adapt the concept of rewarding their drivers, for good driving behavior which helps the company to reduce the amount spent on insurance claims since it boosts up the confidence in drivers to be even more careful while driving and reducing the rate of on-road accidents.
On comparisons, Insurers can see the monetary and environmental benefits of UBI policies. Now realizing these benefits many Auto Industries are also promoting UBI policies adhering devices.
Every company plans some part of the revenue generated to cover cost of the claims. But by implementing UBI they can reduce the expenses and distinguish the profit margin that grew by just monitoring driving behavior which is not even a hectic task to monitor and also promote good driving behavior.
Therefore UBI has got its own advantages for the insurer and the insured, where the insurer can save themselves from false claims and the insured can reduce his premium amount by keeping a normal check on his driving pattern.
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