Vehicle Owners Opting for Usage-Based Insurance Models to Get Fair Premium Quotes

Usage-based insurance refers to a type of vehicle insurance that leverages in-vehicle communication systems to track vehicle mileage and monitor driving behavior. Thus, the burgeoning sales of telematics-equipped automobiles and mounting demand for connected car services will strengthen the usage-based insurance market in the years to come. The escalating demand for connected cars can be attributed to the mounting customer focus on vehicle and passenger safety and the growing need to stay connected to the outside world.

Usage-Based Insurance Market Outlook

Additionally, the increasing penetration of smartphones integrated with vehicle connectivity systems will create a huge requirement for usage-based insurance. Nowadays, insurance companies are focusing on usage-based policies to improve profitability, as the data collected through connectivity solutions can be used to calculate the insurance premiums to be paid by vehicle owners. Thus, the rising acceptance of in-car connectivity technologies and increasing willingness of customers to share their driving statistics to get personalized insurance quotes will fuel the adoption of usage-based insurance packages in the foreseeable future.

According to P&S Intelligence, North America will dominate the usage-based insurance market in the forthcoming years due to the burgeoning demand for connected cars and increasing adoption of the black box insurance technology in the region. Additionally, the strong presence of prominent vehicle insurance firms that use this technology to track driving habits encourages the adoption of usage-based insurance here. Black-box-technology-enabled devices collect detailed information for vehicle insurance companies and allow them to estimate the insurance risk levels with precision.

Therefore, the burgeoning demand for telematics-equipped vehicles and escalating integration of smartphones into vehicle connectivity systems will encourage the adoption of usage-based insurance modules across the world.