Around half of drivers are unaware of insurance telematics plans
The findings highlight an opportunity to better educate policyholders on the potential of usage-based insurance.
While 52% of motorists think it is fair to base auto insurance rates on driving behaviors, 41% said they were unfamiliar with telematics applications for insurance, according to The Zebra.
Broken down by cohort, Gen Z is the least likely to know about telematics and older Gen Xers (45-54) are the most likely to grasp the technology. However, Gen X is also the least willing to select a telematics-based insurance policy.
Further hampering adoption is the fact that most policyholders are unwilling to share their driving and location data with an insurance company, The Zebra reported. There is an exception to this, however, as millennials have shown a higher level of comfort with sharing driving and location data compared with other generations.
To overcome data privacy concerns, insurers should strive to be very clear about how the data will and won’t be used, according to the insurance comparison site. For example, Gen Z has shown a willingness to let go of privacy concerns and share data in exchange for personalized experiences. Insurers can capitalize on this by highlighting the customized nature of usage-based policies.
Motivating factors
Most (62%) of motorists said usage-based pricing is fair, but more than 40% of respondents said nothing would get them to consider a telematics program.
For consumers that could be persuaded to try a telematics plan, saving money was the biggest draw. Drivers said they would also be more interested if data security was guaranteed and if the program could make them better drivers.
Additionally, most drivers said they don’t think they’d uncover any savings by leveraging telematics in a policy, according to The Zebra.
These findings show that the insurance industry has a consumer education opportunity around these plans, according to The Zebra. To this end, customer service reps should be fully versed in telematics programs and have the ability to explain the benefits. However, a survey found that only 32% of insurance customer service representatives are provided with “some or plenty” of resources regarding telematics.
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