Do you not drive your car a lot? You could save a bundle on auto insurance
At the worst of the pandemic, Indian poet Prasoon Joshi said: âEvery crisis opens the way for great change. Joshi’s words follow. As we emerge from the isolation of the pandemic, we take note of all that has changed. We’re looking for more imaginative ways to put money in our savings accounts and prepare for the next emergency that may arise.
Just as we’ve changed, so have businesses across the country. Struck by the impact of the global pandemic, many companies have had to adapt to stay afloat. The Ascent reached out to Sarah Jacobs, vice president of personal line product development at Nationwide, to find out how her business has changed over the past 16 months – and what those changes mean to us as consumers.
A new approach
According to Jacobs, âThe days of the ‘one policy for all’ approach to auto insurance are over. Drivers have unique needs and should be able to purchase insurance that meets their needs. After all, it doesn’t make sense to pay for more coverage than you need to.
Jacobs points out insurance options based on the use of Nationwide: SmartRideÂ® and SmartMilesÂ®. Both are an example of giving the consumer what he wants and helping him save money.
What is usage-based insurance?
Usage-based insurance (also known as âpay as you driveâ or âtelematicsâ) uses your driving behavior to calculate your premium. The safer you are behind the wheel, the lower your premium.
To better understand how usage-based insurance works, we break down SmartRideÂ® and SmartMilesÂ®.
SmartRideÂ® is perfect for occasional riders with excellent driving habits. Here is how it works:
- After registering for SmartRideÂ®, the driver downloads the SmartRide app to their smartphone, activates it and drives as they normally would.
- Drivers can check out the app whenever they want to see how they’re doing and how their driving habits can save them money.
- Based on the driving behavior recorded on the SmartRide app, the driver learns how large his reduction will be and can lock it in.
Four factors go into determining the driver’s discount:
- Number of kilometers traveled
- Frequency of hard braking and acceleration
- Idle time
- Night driving quantity
SmartMilesÂ® is another benefit of having Nationwide auto insurance and is designed for people who drive less than the average driver. It’s especially appealing to those who live and work downtown, work from home, or have an extra car that they rarely drive. While drivers benefit from the same type of coverage as with a traditional national policy, they are offered a monthly rate based on the number of kilometers traveled. It puts control back in the hands of a driver who wants to save money on their auto insurance by driving less.
According to Jacobs, SmartMilesÂ® launched in seven states in 2019. Once the pandemic struck and drivers were spending less time on the road, the company expanded the program to 40 states.
Change was necessary
“We knew 2020 was going to be a year of change, but no one could have predicted how the COVID-19 crisis would reshape the business environment and accelerate the need for change in the insurance industry,” we said. Jacobs said.
The company has also developed Nationwide Express, which helps agents deliver multi-line policies and close deals in minutes. In addition, it launched âconversational smsâ, a technology that allows its customers to connect directly to their claims representative from a smartphone. Again, the power is in the hands of customers by allowing them to contact their claims representatives from anywhere in the world. It’s both technologically savvy and a thoughtful way to respect client time.
The contagious nature of COVID-19 has also inspired Nationwide to accelerate and expand the use of virtual damage assessments. This means that videos, photographs, and drones can all be used to assess and deal with damage.
As policyholders who purchased SmartRideÂ® and SmartMilesÂ® have saved up to 40%, Nationwide predicts that 70% of new auto business will switch to usage-based coverage by 2025.
Tips for reducing car prices in 2021
For drivers looking for ways to control their auto insurance premiums, here are seven tips that might help.
- Sign up for a usage-based program.
- Don’t pay for more coverage than necessary (if someone drives a few miles a week, they shouldn’t be paying a few hundred miles).
- Shop around for auto insurance quotes before buying a car. Simply put, some vehicles are more expensive to insure than others. Drivers need to make sure they can afford both a new car and a higher insurance premium.
- Increase the deductible. The higher the deductible, the lower the premium. Before making the switch, however, drivers should make sure they have enough cash on hand to cover the new, higher deductible.
- Check out the discounts. Insurers offer discounts for everything from age to profession. Determine the applicable discounts and take advantage of them to reduce the premium.
- Bundled coverage. Purchasing different types of coverage (such as auto, homeowners, renters, and life insurance) with a single company can give drivers a great rate reduction.
- Rethink the cover on an old car. Let’s say a vehicle is 15 years old and has a Kelley Blue Book value of $ 1,200. Maybe it’s time to cut back on comprehensive coverage and focus on liability for an immediate rate cut.
If an insurance company can change over time, that might be a sign that we can too.