Insurance carriers with a clear telematics policy that explains how driver data is collected and used, such as personalized policies and rates, could overcome data-sharing concerns, especially among younger policyholders. (
Credit: Denys Prykhodov/Shutterstock.com)
Rising premiums combined with low customer satisfaction are causing nearly half (49%) of U.S. policyholders to reconsider their auto insurance carrier, according to the J.D. Power 2024 U.S. Insurance Shopping Study. The study revealed 29% of those shopping around switched to a new carrier in the past year, with Gen Z making the most changes. Some policyholders are concerned that telematics programs are the reason behind their higher rates.
Data biases
Usage-based insurance with telematics programs relies on data from the policyholder's vehicle or an app on their smartphone to assess risk. The software tracks speed, acceleration and braking patterns to evaluate the driver's behaviors behind the wheel, with the promise of tailored premiums based on the data analysis. Policyholders can prove they are safe drivers to qualify for lower premiums, but some have concerns about when and how this information is used and shared.
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