How Technology Impacts Car Insurance

Look to Geico & Progressive

As we start a new year in 2013 there are things we can all do better manage our car insurance needs. One of the biggest drivers for improving the way we go about things is with technology.  Car insurance companies are improving the way they use technology to provide a better product to customers they serve.  Progressive and Geico offer a couple of examples of how they are improving the way car insurance is managed.

What to Learn From Progressive

Technology on the web

Progressive has been on the fore front of many improvements in technology.  The company has always been recognized to having one of the better websites among insurers.  With the growth of the internet this has made it easier to serve customers on their terms.  There becomes much less self reliant on a company when resources can be obtained 24 hours day and 7 days of week.  Progressive effectively leverages the web to provide drivers new quotes in a matter of minutes and will also provide prompt customer support over the telephone.  Along with quotes Progressive has most of the tools you need to maintain your policy, such as making payments and filing a claim.

Technology in the car

The other facet Progressive has been a leader in is using technology with our cars.  An example of this is from their snapshot program.  Progressive is able to attach a device in your vehicle to monitor how many miles you drive as well as look at other driving qualities such as braking and speeding.  With the additional information Progressive obtains they are better able to match your risk with what you should be charged.  The technology, called usage based insurance, has been gaining popularity over the last few years.  Progressive has been the leader where they offer their Snapshot program in over 40 states.  The take away for the consumer is usage based technology will allow them to get the fairest price possible.  This use of technology enables Progressive to gain more and better information on driving habits and allows them to more effectively monitor the risk you carry.

What to Learn From Geico

Geico, as a direct car insurance company, has also leveraged technology.  Over the last 15 years Geico has been of the fastest growth companies in the car insurance industry.  Geico has utilized the web as a resource just like Progressive has.  In addition, Geico has been out on the curve with their Smartphone application.  Geico has a variety of information a consumer can benefit from with their app.  Examples of this relate information on how to fix a flat tire and also the required steps to filing a claim.  When you compare Geico to other car insurance apps it is easy to see how impressive Geico has been in using technology to better serve your needs.

Direct Insurer Benefits

Both Geico and Progressive are direct insurance companies.  This means the company will issue you car insurance directly as opposed to having to go through and agent.  Technology has been an excellent way to gain a competitive advantage and become more efficient with existing resources.  In keeping cost down with technology both companies are able to allocate resources to marketing.  It is easy to see this with all of the media advertisements.  Geico and Progressive are two companies we see just about everyday and technology is a big reason why.

The Future of Technology with Insurance

The biggest reasons, in my view, with technology will how usage based technology changes the way insurance is priced and maintained.  This should be a win win for both the consumer and the insurance companies.  The reason is that for the consumer, insurance will be more fairly priced as it will be easier to match the risk you carry with what you pay.  If you only drive a few hundred miles a month and never speed it is only fair you should see low rates.  Technology will help show your risk and measure your pricing more closely to this risk.  The insurance companies will also gain as with more information they should be able to gauge the level of exposure a driver has.  If the motorist is a high risk insurance companies can increase pricing to what they perceive the risk to be.

 

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