Insurance TelematicsMarket Activities

Pay-As-You-Drive UBI loosing its popularity in the United States: insuranceQuotes

Published: January 14, 2015 | San Fransisco, CA

According to a new insuranceQuotes.com survey, Millennials are the most likely to sign up for pay-as-you-drive insurance and the least concerned about related privacy issues.

InsuranceQuotes_UBI_US_millenials

The survey, conducted by Princeton Survey Research Associates International—which polled 1,001 American adults in December 2014—51 % of respondents said they wouldn’t consider enrolling in a PAYD program.

The overall awareness of PAYD programs has decreased over the past year, with 36 percent of respondents saying they have heard of PAYD compared to 42 percent in 2013. The report suggests these programs appeal most strongly to millennials and that many drivers have lingering concerns about how they work.

telematics-PAYD-UBI-insurance-and-millennials

Most Americans incorrectly think that pay-as-you-drive insurance programs monitor for drunk driving and driving in high-crime neighborhoods (they do not).

On the contrary, most pay-as-you-drive programs measure mileage, how hard drivers hit their brakes and what time of day they drive – but the majority of Americans answered those questions incorrectly as well.

Of the respondents who would never consider signing up for pay-as-you-drive insurance, 21% said their primary concern was sharing personal information. That was the second-most popular answer behind “I don’t understand how it works” (26%).

telematics-pay-as-you-drive-insurance-and-millennials-3

Almost three-quarters of Americans who have heard of pay-as-you-drive insurance learned about it from a television commercial. Millennials were more than twice as likely as their older counterparts to hear about pay-as-you-drive insurance from friends or family.

Misconceptions about pay-as-you-drive insurance

Every insurer’s pay-as-you-drive program differs slightly in terms of the data that’s collected and how this data is used to provide a premium discount.

USA_Flag_DOT_Connected_Vehicles

For instance, Allstate’s Drivewise program tracks a driver’s speed, braking habits, mileage and the time of day his or her car is being driven.

The Hartford’s TrueLane program records braking habits and mileage but also measures how quickly a driver accelerates the vehicle – however, they don’t factor in time of day the vehicle is being driven.  

According to the survey, consumers have some misconceptions about the information an insurance company may gather through usage-based programs, as well as the impact that information may have on their insurance rates.

For instance, 52 percent of respondents said they think insurers can gather information about whether or not they’ve been drinking and driving (they can’t).

And 35 percent of respondents said they think driving in “neighborhoods with a lot of crime” could increase rates (it can’t).

Please watch this video for more information on the survey:-

The PSRAI December 2014 Omnibus Week 2 obtained telephone interviews with a nationally representative sample of 1,001 adults living in the continental United States. Telephone interviews were conducted by landline (500) and cell phone (501, including 306 without a landline phone). The survey was conducted by Princeton Survey Research Associates International (PSRAI). Interviews were done in English and Spanish by Princeton Data Source from December 11-14, 2014. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is ± 3.5 percentage points.

Source: insuranceQuotes.com

Tags

Related Articles