What is usage-based insurance?
The future of auto insurance
Usage-based insurance is the tracking of driver behavior by on-board, in-car telematics systems to get a more accurate picture of the hazards (or lack thereof) drivers pose to other people on the road. There are several different models for usage-based insurance currently being used by a number of insurance providers.
Also known as “Pay as You Drive,” or “PAYD”, usage-based insurance solutions vary widely. One of the original concepts for tracking driving behavior in order to determine auto insurance premiums was the process of simply monitoring how much a client drove their vehicle, the logic being if the driver is on the road less, they are less likely to cause an accident and file a claim with an insurance provider.
UK-based insurance provider Insurethebox was one of the firms that adopted this program early on. By installing a telematics device called a Clear Box (roughly the size of a cell phone) in a car, it could track how many miles a vehicle was driven in a year. Premiums were based on a sliding scale, with those driving less than 6,000 miles annually privy to the lowest rates. Clients could purchase “top-ups” that allowed them to drive even more without seeing a significant increase in their insurance premiums.
Since that time, however, a number of other usage-based insurance solutions have emerged. Progressive Insurance in the United States is arguably the leader in advancing usage-based insurance with its Snapshot program. It uses a telematics device attached to a vehicle’s On Board Diagnostic port (OBD-2 port) to transmit not only how many miles the automobile is driven, but also when it is driven and at what speeds.
Other usage-based insurance solutions include OnBoard Advisor from Liberty Mutual Insurance. Available to private clients as well as commercial users, it tracks vital driving statistics. However, Liberty Mutual Insurance will not access this information unless there is an accident and a subsequent claim.
IMS UBI Intelligence
The most comprehensive usage-based insurance solution on the market comes from IMS Usage-Based Insurance Intelligence – a complete, turnkey program that integrates all components needed for an effective solution. The IMS platform is based on the patented IMS DriveSync® technology, and it redefines the concept of an end-to-end solution by providing the only true, complete UBI product that includes device design and production, connectivity, logistics, consumer adoption programs, systems integration, customer care, analytics, portals and even scoring and driving tips. The IMS UBI Intelligence program can be fully outsourced and is easily scalable, allowing for a unique program to be quickly and effectively deployed.
IMS insurance telematics feature:
- Cutting edge device design, logistics, equipment & SIM provisioning
- Secure end-to-end transport
- Dedicated, results-oriented program management team
- Options for value-added services to increase revenue
Find out why IMS is the leader in usage-based insurance with its UBI Intelligence solution. For an immediate response to your usage-based insurance needs, please call Daniel Lajeunesse, Director of M2M Programs at 1.519.745.8887 ex.7005 or email at dlajeunesse@intellimec.com.
See also: Usage-Based Insurance Solutions, PAYD – Pay As You Drive Auto Insurance, M2M & Telematics, Insurance Telematics, IMS Auto Insurnace Telematics
