Paying significant money per month on insurance premiums rarely reflects something policyholders want to do. The critical value of insurance leads many to simply accept “what is” and pay high prices. The insurance industry, however, may be taking steps to better price policies. The way they are doing so might prove intriguing. Insurance companies are tapping connected devices for premium pricing and cost-cutting decisions.
Yes, the internet of things (IoT) brings forth another potential benefit for the public to take advantage of. The ways in which IoT impacts insurance premiums combines sheer simplicity with sound financial decisionmaking.
For example, auto insurance companies can review data about vehicle usage derived from different devices. Accurate data reveals more than just the usage of the vehicle. The data provides insights into the risk level associated with both car and driver.
The more a car operates on the road, the greater the chances become that it might be involved in an accident. Even simply parking a vehicle in a metropolitan area increases the hazard potential of someone damaging it. Logged data that proves the vehicle isn’t at great risk could reduce the costs associated with an insurance policy. Customers positively appreciate anything saving them money.
The customer isn’t the only entity benefiting from reduced premiums. Insurance companies offering great rates draw in more customers. And insurance companies do need customers to earn profits and pay out on claims. “Big insurance “ has a lot to be thankful about in regards to the growth of the internet of things.