Is the Car Industry Advancing Faster Than the Insurance Industry?
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As it stands today, the car industry is easier to navigate and more accessible than ever before. Car-buying customers have the option to purchase their vehicles online, finance payments, and change vehicles at almost any time.
We’re seeing brands like Tesla change the car-buying industry by using customer data to make purchasing and owning one of their vehicles a seamless process, and more and more car brands are following suit.
Clearly the car industry is evolving, and fast, but it seems the car insurance industry just can’t keep up. Imagine a world where you didn’t have to guess your future driving habits for an insurance rate, or one where car insurance was easily received with the purchase of a car. If car insurance evolves in the same direction as the car industry, those dreams might just become reality.
The car industry is evolving fast, and car insurance is having a hard time keeping up.
Why is the car insurance industry behind?
Purchasing car insurance isn’t as easy or straightforward as purchasing an actual car, and customers have complaints. People want flexibility and ease when it comes to their cars and automotive services, but car insurance is something you need to go out of your way to find, compare deals, and ultimately purchase completely separate from your vehicle.
In an Automotive World article, author Darius Kumana points out that the car insurance process is outdated, with customers having to guess how many miles they’ll drive per year, what type of driving they’ll do (business or personal), and more, to actually get an insurance quote.
On top of that, car insurance can’t be easily switched or updated in the event that you get a new car, or if you stop driving a car altogether and get a different mode of transportation.
Why does it matter?
Outdated car insurance practices are making it harder for car buyers to purchase insurance at accurate and affordable rates for their individual driving habits. Since car insurance is determined based on estimates, you could be paying more than you actually need to on insurance.
Not only do car insurance purchasers need to dedicate extra time to finding insurance after buying a car, but they often need to repeat this process every time they change vehicles.
If the car insurance process was streamlined and data driven, customers wouldn’t have to think about car insurance beyond buying a car, and would overall save time and money in automotive services.
The future of car insurance
Most important to making change, the car insurance industry first needs to keep up with the advances in connectivity the car industry is making every day.
Many car brands now have the ability to interrogate cars through their sensors long after they’ve left the showroom. Car brands use this technology to keep tabs on your driving data and implement that knowledge to enhance your car experience and possible future purchasing decisions.
If car insurance providers also had access to this type of driving data, they could create and update personalized insurance plans that best fit the needs of each customer based on driving habits. This means, you’d be getting the cheapest car insurance possible for your driving habits.
Second, the car insurance industry needs to partner with the car industry in a more intimate way than ever before. Car insurance has historically been a separate entity from car sales, but they should be one and the same.
If these two industries can work together, car insurance can be part of the buying experience, making the consumer’s life easier and car websites or dealerships a one-stop-shop for automotive needs.