How technology is changing car insurance

The Car Insurance industry has dramatically evolved to keep up with changes in the motor sector. Budget Insurance lists the various cutting-edge tools that the insurance industry uses to enhance and streamline its operations and products.

As cars have become increasingly more sophisticated to accommodate the challenges of modern living and the preferences of today’s drivers, insurers have had to update their offerings to address the needs of car owners. These changes include accounting for the impact of climate change on roads and customers’ needs for more sustainable and autonomous forms of transportation.

*Haval even offers its compact family car model in petrol-electric hybrid guise.*

Statistics reveal that these shifts have already started to take place. While sales of electric vehicles in Mzansi are lower than in other countries, some experts believe sales will increase as electric and hybrid vehicles become more accessible and affordable and more entry-level models enter the market.

Additionally, these types of vehicles align with the Government’s 2023 National Development Plan, which recognises sustainable development’s role in helping the country reduce its carbon footprint.

As these cars become more commonplace, this will impact how service providers approach liability and all things insurance-related. That’s why it’s important to revisit your Insurance policy occasionally.

*The Audi e-tron GT is the Ingoldstadt-based marque’s flagship EV in the South African market.*

The impact of technology on car insurance

The innovations present in your car impact your insurance in many ways. These innovations fall under the insurtech umbrella — a portmanteau of “insurance” and “technology” encompassing the various cutting-edge tools the insurance industry uses to enhance and streamline its operations and products.

It includes the Internet of Things, machine learning, big data analytics, blockchain technology, mobile applications and artificial intelligence. All of this technology allows car insurance companies to customise their underwriting, policy, administration, claims and customer service processes to become more efficient and cost-effective while better anticipating and meeting customers’ needs.

Here are a few examples of common technology innovations and adaptations that could be present in your car and how this can impact your car insurance.

Telematics involves using internet-connected devices such as smartphones to collect, share and transmit data concerning a person’s driving. For example, insurers can offer drivers smartphone applications that, when downloaded, can track their driving patterns and log if they speed, break or accelerate excessively or use their phone while driving. A person who drives with a high element of risk could pay higher premiums, while a person who is a more cautious driver would pay less.
Data analytics – By inputting and analysing large data sets for patterns and trends, insurers can create more refined and individualised risk models to provide policyholders with a more accurate risk assessment, which could affect their premiums.
Artificial intelligence – This tool can provide customers with a time-saving and streamlined experience when interacting with insurers. This can ensure that they spend less time submitting and following up on claims and being able to manage the process entirely online. Chatbots, for instance, are used in many service industries for convenience and real-time assistance around the clock.

Consider these Car Insurance tips for 2024

With insurtech set to become part and parcel of most standard insurance offerings, the following tips can help you prepare for its integration or make better use of its tools to get more out of your insurance – or find one better able to meet your needs.

Use comparison tools – Various online aggregator tools and platforms allow you to compare similar insurance offerings side-by-side, so that you can easily see how each differs or is similar. Budget Insurance‘s team should also be able to address any comparative questions you have.
Watch your driving – By being more aware of road rules (and following them as closely as you can) the telematics or usage-based insurance programs that monitor your driving habits can accurately assess you as a driver (and client). If you drive diligently your monthly premiums could be reduced.
Consider usage-based policies – data analysis can give you insights into what characteristics higher and lower premium drivers possess so you can qualify for a lower deductible due to your lower risk.
Revisit your insurance – You should revisit your insurance whenever your lifestyle or car ownership changes so that your insurance cover meets your current needs. An example is moving to a more secure premises, where your car is now parked inside a locked garage, whereas previously, it was parked on the street. In this case, your premiums could decrease due to the reduced risk of theft.
Maintain your finances – Risk profiles evaluate a person’s entire financial situation when informing premium calculations. Paying attention to your overall credit behaviour and score by avoiding making late payments or generating a lot of debt can help keep your premiums low.

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.

Get a quote now

If you want to learn more about car insurance or review your car insurance requirements with the help of experts, Budget Insurance‘s team is always ready to assist. Contact them on 086 1600 120 or leave your details and they’ll call you back at no expense to you! You can also request an online quote.