Published : May 28, 2014
The New York Department of Financial Services (DFS) issued a bulletin to auto insurers doing business in New York urging them to adopt “usage-based insurance” (UBI) programs. Under these voluntary programs, consumers can install telematics devices in their cars and catalog data on driving habits. A discount will be provided to the more careful drivers.
The announcement by DFS Superintendent Benjamin Lawsky followed his approval of a program at Esurance aimed at helping parents prevent their teenagers from texting and driving. Lawsky said under Esurance’s voluntary program, policyholders may install an in-car device that, in conjunction with an Esurance app installed on their teen driver’s phone, can limit the use of texts, emails, applications and phone calls while driving (with the exception of 911). The device can also catalog driving behavior, including speeding, hard braking, fast acceleration and other activities, Lawsky said.
In a statement, Lawsky made clear that the Telematics programs can be a win-win for insurers and drivers. They can save policyholders money and save lives by making our roads safer.
UBI programs give less cautious drivers the incentive to drive more carefully, which can help reduce auto accidents. As more customers gain better driving habits, an insurer can experience lower overall costs, which could lead to lower auto-insurance premiums statewide.