Personalised Covers Based on Vehicle Tech Features

Role of Vehicle Telematics and Connectivity in Personalising Covers

Vehicle telematics and connectivity are the backbone of tech-driven personalisation in car insurance. For those new to telematics, it refers to the advanced technology that collects and transmits driving behaviour and vehicle data, such as speed, braking patterns, GPS location, engine health, etc., in real time. 

This technology is embedded through a telematics control unit or a connected smartphone system. When insurers integrate telematics, they move beyond static risk profiles. They use this data to base coverage and pricing on how the car is actually operated. 

Hence, telematics-based insurance rewards individuals with responsible driving habits by proposing lower premiums. People with a high-risk profile are charged higher premiums to offset the associated risk.
 

AI and Machine Learning Enhancing Policy Personalisation

While the car’s telematics and connectivity features help insurers gather vehicle data and driving behaviour, AI and machine learning amplify this data. It enables insurers to make sense of the vast, complex datasets that would be impossible to interpret manually. 

Rather than simply collecting raw information, machine learning and AI in car insurance are used to identify patterns in driving behaviour. These patterns are then correlated with historical claim outcomes to generate accurate risk models that reflect the actual likelihood of future claims. 

Insurance companies can use this intelligence to recommend personalised car insurance covers. The exact mechanism is used to price premiums fairly. These systems continue to learn from new data over time. As a result, they begin refining predictions and dynamically adjusting usage-based insurance coverage. It improves pricing accuracy and also enhances customer satisfaction.
 

Impact of Advanced Safety Features on Insurance Coverage

Most modern cars feature advanced safety features, which directly influence policy coverage and premiums. We’re talking about standard safety features, such as ADAS, collision-avoidance systems, and emergency braking. If you’re a policyholder trying to understand how these features influence insurance coverage and premiums, you must read the following points.

• Advanced Driver Assistance Systems (ADAS)

ADAS features, such as lane-keeping assist, blind-spot monitoring, and adaptive cruise control, help the driver avoid risky situations. Hence, insurers classify vehicles equipped with ADAS as low risk. 

Since these safety features prevent common causes of accidents, car owners can get a discount on premiums and more favourable coverage terms. 

• Collision Avoidance

Cars with collision avoidance systems use sensors, radars, and cameras to detect imminent crashes. If a potential collision is detected, the system will either warn the driver or intervene automatically. 

This system reduces accident frequency and, in turn, lowers claim requests. Hence, cars with a collision-avoidance system may qualify for lower premiums or better coverage terms. 

• Automatic Emergency Braking (AEB)

This safety feature automatically applies brakes when a collision is expected, and the driver fails to respond in time. Insurers value this feature because it lowers crash occurrence and injury severity.

It directly impacts the eligibility for premium discounts. If your car has AEB, insurers may view it as a positive factor while designing your personalised car insurance cover.
 

Future Trends in Personalised Car Insurance Covers

Significant advancements have been made in the auto insurance sector through the integration of vehicle technology. However, you can expect further improvements as these potential trends unfold. 

• Growing Role of Connected Cars

Connected cars will remain at the centre of personalised car insurance covers. These cars continuously share driving behaviour, location data, and vehicle diagnostics with cloud platforms. This data sharing allows insurers to move towards real-time risk assessment. 

So, future telematics-based insurance policies might reflect how, when, and where a vehicle is actually used, rather than relying on static annual assumptions. 

• Over-the-Air (OTA) Updates Affecting Coverage Terms

In the future, OTA updates will improve your car’s safety features or driving assistance software without physical modifications. It will alter your vehicle’s performance and risk profile. Once the risk profile is changed, insurers may adjust coverage terms or pricing mid-policy. 

• Dynamic Policy Adaptations

As insurers continue to receive real-time data from telematics and connected systems, they may permanently shift to dynamic insurance models. Under these models, everything from premiums and deductibles to motor insurance add-on covers may be adjusted over time based on the policyholder’s driving behaviour and vehicle usage. Car owners may support this shift as it promotes fairer pricing.
 

Conclusion

For decades, premiums were calculated based on broader factors, such as the vehicle’s age, model, and user demographics. While this system served its purpose at the time, it is no longer relevant. Insurers are now using vehicle tech features, such as telematics and connectivity, to provide personalised car insurance covers.

It’s a fair pricing model in which premiums are determined by a vehicle’s usage and the policyholder’s driving behaviour. If you want to secure your vehicle under this usage-based insurance model, consider Shriram Car Insurance. It follows the ‘Pay-As-You-Drive (PAYD)’ model, where you pay premiums according to how much you drive.
 

FAQs

1.How does vehicle technology affect insurance coverage?

Vehicle technology enables insurers to assess real risk by providing real-time insights into the vehicle data and the policyholder’s driving behaviour. So, if you’re a responsible driver, you will be given lower premiums or better coverage terms.
 

2.Can telematics reduce car insurance premiums?

Yes, it can. Telematics rewards safe driving behaviour and lower mileage with usage-based insurance pricing.
 

3.What AI tools are used to personalise insurance plans?

While specific tools are not made public by any insurer, you can know which technology they use to personalise insurance plans. They typically use advanced machine learning models, predictive analytics, and neural networks to create personalised insurance plans.
 

4.Do safety features guarantee policy discounts?

While there is no guarantee, you may receive policy discounts if your car has advanced safety features.
 

5.What’s the future of personalised insurance in India?

The rising adoption of telematics, connected vehicles, and regulatory support indicates a stable growth for personalised insurance in India.