Most connected car drivers aren’t unlocking premium discounts with data
Over 70% of drivers are interested in using connected car data for insurance discounts, but less than a quarter do.
A majority of drivers (67%) are aware that connected cars can capture and transmit telematics data that can result in lower insurance premiums, but just 22% of connected car drivers are using data to unlock car insurance discounts, according to a survey by LexisNexis Risk Solutions.
Among connected car drivers that aren’t leveraging telematics data for insurance purposes, 71% said they would be interested in doing so. Any vehicle with the ability to tap into a wireless network to send and receive data is considered a connected car, according to LexisNexis.
This news comes as J.D. Power reported that the adoption of usage-based insurance (UBI) and telematics programs has doubled since 2016. Further, policyholders that participate in UBI programs report higher satisfaction scores, on average.
Further, a J.D. Power and TransUnion report found inflation helped fuel a 33% adoption in auto telematics programs during the first quarter of 2022.
“More consumers are warming to the idea of using a telematics tool to enhance safe driving, while also lowering costs,” Michelle Jackson, senior director of personal lines market strategy at TransUnion, said in a report. “Consumers are shopping for lower premiums, better coverage and superior service from their insurer.”
Used vehicle market is largely untapped
Those purchasing a new vehicle are twice as likely to be offered a free trial to automakers’ connected services compared with those purchasing a used vehicle, LexisNexis Risk Solutions reported. This represents a large, untapped market as 83% of used connected car owners aren’t enrolled.
When offered a free trial, 85% of car buyers accept, according to LexisNexis Risk Solutions. Further, 45% end up converting to a paid subscription after the trial ends.
Among those that were offered a free trial, but declined, 63% said they did so because the value or benefit wasn’t immediately clear. However, LexisNexis reported that 66% of drivers were unaware of these services before purchasing a connected car, while nearly 60% said they weren’t offered a trial by the dealership.
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