Drivers Open to Telematics-Based Car Insurance, Survey Finds

A study based on three surveys conducted between June 2017 and January 2020 showed 63% of U.S. consumers are open to changing from their current policy to usage-based car insurance with a telematics-based premium, said Cambridge Mobile Telematics and IoT Insurance Observatory Tuesday. Many drivers showed interest in working with insurers to price their insurance based on how they drive vs. traditional rating factors such as ZIP code, age and gender, though only 5% of U.S. drivers use a telematics-based policy. Drivers are interested in different value propositions including upfront discounts, rewards and discounts at the time of renewal, with young, urban drivers the most likely candidates to opt for connected insurance. Just over half of respondents would look to traditional insurers for telematics programs; 20% chose nontraditional tech companies like Amazon as a possibility, “indicating an upcoming challenge” for traditional insurers.