Monthly Archives: April 2016

Is Mobile Telematics Technology Promising for Auto Insurance

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At a time when road accidents cause the death of millions, there is a need to check driving behavior through mobile technologies.

According to WHO, 1.25 million people die due to road accidents. WHO also estimates accidents will be the seventh leading cause of deaths globally. Is there a need to press the panic button in the face of these figures? What kind of education is required to check accidents or reduce the accident risks? Let us dwell deeper.

According to Bob Joop Goos, chairman of the International Organization for Road Accident Prevention, “Over 90% of accidents are caused by human error.” Human error is all about driving behavior, isn’t it? Well, if it is so there is a need for a driver scorecard for improving driving and making driving safe. This is to ensure that he get his insurance claim hassle free for losses incurred. Having come thus far, let us go into the technical aspects of enhancing ones driving behavior. Moreover, let us also consider whether one has to pay ‘fixed premium’ or ‘pay as you go’ or ‘pay how you drive’ for auto insurance.

A person living in the State of Alabama is paying $1,500 a year on an average. Suppose a person living in the city is paying $1500 where he is prone to more accidents against a person lives in the suburbs paying the same amount where less chances of accidents. Suburban drive is easy compared to driving in cities. Remember the city driver will drive lesser kilometers in comparison with the suburban driver who drives more. The city driver is prone to more accidents. On the other hand the suburban driver is prone to more wear and tear of his vehicle. If fixed premium is collected from both drivers, how does this make sense? Now if you are giving an option to choose between the following:

• Fixed premium annually
• Usage based Insurance (UIB) which is pay-per-use

What will you choose? Everybody wants to be cost effective; none wants to end up in loss. Therefore majority is likely to choose the second option. The reason is more customers are mobile. Customers can download the mobile application on mobiles to track their driving data. Risk assessment is easy with mobile telematics application. Assessing risks like driving at peak traffic hours, following traffic rules or not, parking hassle free, speed driving etc., and take necessary precautions in future with the help of tips provided by the application on mobile device.

Digital technologies are empowering the insureds to pay as you drive (PAYD) insurance, pay how you drive (PHYD) by the customer. How this is going to affect the insurance industry? This is another area that requires discussion.

Mobile telematics technology integrates technologies like Global Positioning System (GPS), Mobility, Cloud and Big Data analytics where driver uses data to enhance his driving behavior. This will reduce accidents. The mobile app gives information on like hard braking applied, rapid acceleration, road types, driving smoothness, phone distraction, traffic alerts, speed and mileage etc. Besides, insurers can deliver personalized services and bring in new customers by reducing processing delays. Club the advantage of enhancing driving behavior with Usage Based Insurance. This will surely get the support from State as well as from businesses.

Shall we gain more insights on this? Businesses are looking for productivity, government wants productive citizens. No one wants their productive ones to be injured or be a burden. It is in this context there is a likelihood where insurance companies, businesses, and government may work together to reduce productivity risks. Driving behavior is the prime cause for road accidents. Mobile telematics technology has the capacity to enhance drive behavior, reduce accident risks and workflow not disrupted.

Mobile telematics technology also has its bearing on automobile industry. As we know luxury automobile manufacturers come with inbuilt telematics, small brands charge extra for automobile electronic accessories. These black box technologies are pushing the cost of cars upwards. In such a scenario, mobile telematics technologies lowers technology cost with the integration of integration of technologies such as Global Positioning System (GPS), Mobility, Cloud and Big Data analytics on smart phones. Advantage for would be vehicle owners.

At a time when deaths caused by accidents are listed as seventh worldwide government, insurers, businesses and the general public, mobile technologies offer hope to reduce risks. Canada is hosting Insurance Telematics Canada 2016 on 28, 29 April at Double Tree Hilton, Toronto. In the previous year 2015 43% of insurance companies attended the event. This year the event intersects auto tech and insurance expecting more attendance to brainstorm.

 

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Accident Insurance and More

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car accident insuranceAccidents happen and they happen all of the time.

Before 1848, there was no official manner in which travel on railroad could be immune to the eventuality of risk exposure to losses and damages. In a groundbreaking move, the Railway Passengers Assurance Company of England, sold policies to anyone interested in the coverage. After that, the idea of insurance protection spread like wildfire across the globe – heralding insurance plans for general liability and more – homeowners, commercial, auto, truck, workers comp, life, bonds and so on.

Although the original insurance companies were built on the notion that accidents result in bad consequences, this is not always the case. Who, after all, can claim they do not enjoy a bite of a chocolate chip cookie? Have you ever heard someone complaining about eating a potato chip? And what about modern medicine and the amazing cures they provide? Many of these beneficial products were created by… you guessed it – accidents!

Blessed Accidents

• When a cookie business owner realized she did not have the baking chocolate required for her recipe, she improvised by using a standard bar of chocolate. She reasoned that the chocolate would melt in the oven and become equivalent to the ingredient she lacked. Lo and behold, the chocolate bar in the finished cookie product was her claim to fame as the dotting chocolate chip version became an instant success story.

• After discarding an experiment dish in the trash, scientist Sir Alexander Fleming took a second look: why, the utensil was full of mold that continued to break up bacteria around it! The ‘accident discovery’ led to something amazing – a seeming miraculous drug, known as Penicillin that benefits mankind in every nook of the world to this very day!

• Engineer John Hopps thought he could cure hypothermia by inventing a device that would restore a person’s normal body heat temperature. With radio frequency, he chanced upon what we know today as the pacemaker, used by heart doctors all over to save patients’ lives!

• Who wanted a dish of burned groats? Not two brothers who left the scorched pot full of black contents on top of the stove. When the blackened groats became thick and dry, the men took note. Skimming off the moldy parts, they created the very first bowl of cereal made from corn that you can buy off the supermarket shelves in modern times!

• One disgruntled chef at a resort hotel decided to get even with a pesky patron who kept on complaining about the fried potatoes he was served. The chef fried extraordinarily skinny potato slices that were difficult to munch on. Surprise! Surprise! The customer smacked his lips in appreciation of the first delicious round of potato chips!

 

Deductible And Excess Clause In Car Insurance

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In any insurance policy, a deductible is any expense that the policy holder must pay out of his own pocket before the insurer steps up to pay the expenses. It is also used to describe any clauses that are used as a policy payment threshold. There are actually two types of such clauses in a car insurance policy, namely compulsory excess clause and voluntary excess clause.

The deductible or excess is an amount that the insured agrees to pay from his pocket with the balance being taken care of by the insurance company. This is in the event that any claim arises and the amount is determined beforehand in discussions between the insurance company and the insured.

To take an example of a claim, if the deductible in a car insurance policy is INR 5000, and a claim arises for INR 15,000, then the insurance company would pay INR 10,000 while deducting INR 5,000 from the insured.

The compulsory excess clause in car insurance is something that cannot be predetermined by the insured. This is deducted for every claim compulsorily by car insurance companies. The amount that is to be deducted is fixed beforehand depending on the type and condition of the car. Any claims that arise are paid after the deduction has been made first. If this type of clause is mandatory in a car insurance company, then the voluntary excess clause is entirely an optional matter as anyway an amount is deducted from the policy holder’s pocket for every claim. So taking a voluntary option is entirely up to the policy holder.

The advantage of opting for a voluntary deductible even after the compulsory clause has been evoked is that the premium paid is reduced on the policy. The premium has a part called ‘own damage’ on which the discount is applied. The more the voluntary deductible clause amount is, the more discount insurance companies give you on the premium. It is important to understand though, that even though the premiums are reduced when you opt for a high voluntary excess deductible, should any claim arise, then your out of pocket expense will also be higher. So it is better to choose an excess deductible clause that you can easily afford should any claim arise. The higher the deductible, the higher your expenses out of pocket will be should any claim arise, and if it is not possible to come up with a large amount at short notice, it could put you in an uncomfortable situation.

A deductible and excess clause has its pros and cons, both long term and short term, which should be taken into account before deciding on it.

 

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6 Things Auto Insurance Hates and Auto Thieves Love

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Most folks claim that their car, van, truck, RV, or motorcycle is one the most costly assets they own. Nonetheless it is relatively common for many people to simplify matters for auto thieves.

Don’t make it easy for criminals to make off with your car. Steer away from common mistakes others make so that you will find your vehicle parked just where you left it.

Six Easy Ways to Make Car Thefts Less Easy

1. Never leave your vehicle while the engine is still on.

Though its common practice to warm up your car in the cold weather, resist the temptation to let it stand for even a minimum amount of time without being inside. Doing so just invites the unscrupulous thief to take it and drive off!

2. Never leave your extra car keys within your vehicle.

Auto insurance companies tell us that anyone who leaves a spare set of car keys within their vehicle offers car trespassers looking for loot an opportunity to move one step onward in their crime without problems. Providing the guy who broke into your car seeking objects of value free access gives him one more thing to steal and one more claim to make with authorities – your car!

3. Never leave valuables in obvious view.

Although we all know that leaving valuables that are inside your car easily visible is a clear no-no, there will always be the ‘quick return’ excuse. Don’t succumb to the ‘only a moment’ urge. Always lock expensive items away in the trunk when you exit your vehicle. If that is not an option, make sure you conceal them as best you can so that a passerby will not be enticed to break in.

4. Never leave your vehicle unlocked or unsecured.

Assume that a car thief is a professional in his line of business and that he is an expert in breaking in – even through the smallest of window cracks. On the other hand, the guy who is not a pro will have no problem at all in getting into your vehicle is you leave it unlocked.

5. Never think your car is undesirable to a thief.

Even your jalopy is attractive to the car thief looking to make a few bucks from the junk yards that needs scrap metal.

6. Never stop your vigilance.

Whether your car is parked in your driveway, on the side of the road or in a mall parking lot, be mindful of your responsibility to prevent your vehicle from being stolen and thereby keeping general liability auto coverage quotes down for everyone. Follow the above rules at all times and in every circumstance.

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The Proper Way to Save Money on Auto Insurance

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Saving money on your auto insurance and getting a good value for your premium dollar is not the same as getting “cheap” insurance. Believe me, there are differences between insurance carriers and there is plenty of “cheap” insurance out there. That does not mean you will have the coverage you expect when the worst happens and you need it most! There are however several ways to reduce your premiums. Let’s explore a few that might be beneficial to you:

Take physical damage coverage off your older vehicle. If you carry “Comprehensive” and “Collision” coverage on a vehicle that is over 10 years old, go to the websites for NADA or Kelly Blue Book and check out the vehicles current market value. You may be surprised to learn that you’re spending hundreds of dollars per year for coverage on a vehicle where the return on a total loss may not be a cost- effective investment. Be sure to add however a coverage called “UMPD” that will give you coverage for the market value of your vehicle if it becomes a total loss when in an accident caused by an uninsured motorist.

Increase your physical damage deductibles. The amount that you are responsible to pay when you have been in an accident that causes damage to your vehicle or when your car is stolen or any other covered cause of loss should probably be increased. On average, if you are a good driver, you will probably have a covered loss once in seven years or less so you may be spending hundreds of dollars per year for coverage used infrequently. Get the best value by increasing your physical damage deductibles to at least $1,000.

Insure multiple policies with one carrier. If you decide it is time to “shop” your auto insurance, you should be shopping both your auto and homeowners insurance. Carriers offer significant discounts on both the auto and home policies if they are with the same company. These discounts can be up to 25%. With the cost of insurance these days, that can be enough to pay for that tenants policy that you should have and maybe don’t or the cost of an extra million dollars of liability that you need to properly protect your assets.

Add “towing” coverage on your auto policy. Many carriers offer “towing” coverage that includes key lock out and delivering gasoline if you run out of gas, etc. for far less that purchasing the coverage separately through a “club.”

Having “proper” insurance is so much more cost- effective than not being insured properly, but if you follow some of these tips, you can make sure you have the coverage that makes “cents” for you over many years.

 

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