LTE Blog

Oct 27, 2015

Improving Car Insurance with LTE and the IoT

By: Eran Eshed

In 2008, the number of internet-connected devices surpassed the number of people on this earth, according to tech giant Cisco. As this trend gains momentum, it will continue to transform our lives, from wearable devices that can track and relay information about our health, to apps that can remotely control your home appliances from anywhere. The Internet of Things (IoT) can seemingly remedy many of mankind’s burdens, and today’s businesses — from healthcare to professional sports — are taking note and utilizing the IoT in some form.

One such example is the car insurance industry where, over the last few years, companies are employing the IoT to collect data from cars via video and telemetric technology to record driving habits. The collected data consists of type of vehicle driven measured against time, distance, behavior and location, using odometer readings and in-vehicle telecommunication devices. This data is used in a variety of ways from better assessing premiums and accident damage to instilling safer habits in drivers.

IoT-connected cars, enabled through reduced power and low-cost LTE chipsets, can provide car insurance companies with real-time, pertinent data, resulting in:

  • Fairer Premiums: With credit rating and age being two mitigating factors that have a significant impact on the price of insurance premiums, newly gathered statistics – engendered through the IoT – could provide improved insight into individual driver behaviors, enabling insurance companies to establish fairer and more calculated premium pricing. As the driver builds a history with the insurance company, the premium price could be adjusted accordingly. This way, drivers will be judged primarily on their actual driving, rather than just demographics or statistics.

 

  • Improved accident assessments: With telemetric technology (sensors installed in cars), insurance companies can record significant data from an accident, such as time of the accident, the speed of the car and breaking pressure. Because of the always on, ubiquitous connectivity provided by LTE chipsets, data can be delivered more quickly to the recording database, resulting in more accurate statistics. The data could be used to assist in ascertaining liability, filing claims and assessing damage costs.

 

  • Safer driving habits: Monitored driving means safer driving, plain and simple. With insurance data being measured and delivered through reliable LTE chipsets, drivers will, in turn, have to be much more conscious of their driving habits or face the possibility of an increased premium. The IoT doesn’t just connect devices but enables them to communicate with each other. This can result in automated interactions between insurance companies and drivers. For example, a driver who is speeding, or racking up too many miles, could receive text message and email alerts from their insurance company. These interactions will make drivers increasingly aware of their habits in addition to enabling increased transparency between drivers and insurers.

 

Fast and reliable connectivity supported by LTE chipsets will provide car insurers with real-time and long-term tracking of driver behaviors, ensuring customers fairer premium pricing, more thorough and transparent accident reports, and an increased awareness of their own driving habits. Most customers will soon have a reason to smile as car insurers utilize this new data to make better-informed decisions about their insurance rates.