Independent insurance agents specializing in homeowners and property casualty insurance might not be familiar with telematics, much less realize how telematics might affect them. Traditionally, telematics provided usage-based insurance carriers valuable data for adjusting individual premiums and providing more tailored coverage.
However, with the advent of building information modeling, or BIM, even homeowners can benefit from smart devices that monitor energy usage and lifestyle. While legislative regulations and slow adoption of BIM devices on a residential scale currently hinder telematics from fully taking hold of the home insurance market, there are a few indicators of what property casualty insurance agents can expect, especially if we consider how telematics have affected other types of insurance. Here’s what’s on the horizon:
Traditionally, predictive modeling practices affect the rates agents can offer prospective clients. With telematics in play, carriers can more accurately gauge homeowner behaviors, changing the predictive modeling game entirely. Instead of looking at past collected data to predict future events, carriers can monitor the insured’s behavior on an ongoing basis, in real-time. This will ultimately lead to more products specifically designed to accurately reflect customer lifestyle and meet individual needs.
If we can learn anything from telematics in the auto insurance industry, customers are wary to provide personal data, especially to insurance companies. However, studies have shown that consumers will provide private information if it means a bigger discount on their monthly premium. For instance, home automation might allow carriers to incentivize positive, trackable behavior by offering discounts to customers for locking the door and setting the alarm at night, or for having monitoring devices to check for moisture and flooding.
Better Risk Prevention and Loss Management
Overall, using telematics to track and incentivize good behavior should ultimately aid in reducing preventable accidents, further benefitting agents, carriers, and the insured. Additionally, telematics can help insurers reduce fraud by allowing them to better analyze claims and supporting data. Future monitoring devices might even have the capacity to initiate the claims process before the insured can react to an accident. For instance, home automation devices and sensors could actually record and report event severity, monitoring hail strikes, wind damage, and other natural disasters.
Learn More About ASI
ASI is one of the largest homeowners insurance carriers in the United States. Through a network of independent agents, the company offers home, condo, renters, dwelling, fire, and flood insurance in over half the country, with plans to cover the rest by 2017. Find out more at americanstrategic.com.