But just in case you haven't quite caught the vision yet, here are 10 reasons new technology and artificial intelligence will make your car insurance way better.
(And, yeah, we'll admit it...we're partial to #8.)
1. A.I. can find cheaters.
7.7 billion dollars. That’s the amount estimated to have been paid out in fraudulent excess claims by auto insurers in 2012 — about $22 for every single person in the United States. Where do auto insurers get the funds to pay out all that money in fraudulent claims?
We’ll give you one guess. (Hint: your premiums.)
With artificial intelligence flagging down likely cases of fraud, that number could go down drastically. And when fraud is reduced, so is your insurance premium.
2. A.I. can detect crashes.
No one wants to be left alone at the scene of an accident. Luckily, as A.I. becomes more advanced, that scenario is becoming less and less likely.
A.I. can detect car collisions and alert emergency personnel within seconds—saving lives and reducing costs for you and your insurer.
3. A.I. can price out bad drivers.
There’s no way to put this delicately, so we’ll just say it: some people should not be on the road. Our data show that 20% of drivers cause 80% of the accidents. (Ouch.)
But as A.I. becomes more sophisticated, insurance companies will be able to find individual bad drivers—and, for those drivers, insurance will cost big $$$.
Eventually, bad drivers will be forced to either improve their driving or switch to other forms of transportation—making the roads safer and less costly for everyone.
4. A.I. can improve your driving skills.
You might be a fantastic driver...but no one is perfect. And soon, insurance companies will be able to combine sensor data with machine learning to analyze your driving weaknesses—and tell you how you can fix them.
The upshot? Make a few tweaks to your driving style and you could very well get a discount for being an excellent student.
5. A.I. can warn you about dangerous situations—before you get into them.
Driving down the highway on a rainy afternoon, you may not know that the road is about to become dense with concert traffic.
But your insurance company might. And soon, they’ll be able to monitor weather and traffic on your behalf and warn you when the situation is likely to become dangerous. They may even offer an alternate route or two.
And if you’re the kind of driver who routinely chooses safer routes? Well, we smell a discount.
6. A.I. can help you avoid dicey routes.
Speaking of unnecessary risk, some roads and intersections are just flat dangerous. In all conditions.
By merging accident history libraries with geolocation data, insurers will soon be able to detect when you’re on an unusually risky route and recommend an alternate, safer route.
And, since around half of accidents involve two or more vehicles, safety will improve for everyone, not just customers using this technology. Win-win!
7. A.I. can scare away car thieves.
Thieves steal stuff because they think they can get away with it. And, when it comes to cars, they used to be right.
But with the rise of artificial intelligence, automatic GPS tracking, and embedded sensors, it’s going to become much harder to get away with vehicle theft. And that means lower insurance cost for everyone. (Plus you get to, you know, keep your car.)
8. A.I. can get you a fairer rate on insurance.
Insurance companies are about to learn a lot. For years, they’ve used broad, clumsy categories like credit rating, location, gender, and marital status to decide how much you should pay for car insurance.
But now? Using sensor data and machine learning, insurance companies will be able to set prices with the information that matters the most—how you actually drive. Safe drivers will be rewarded for their behavior with excellent rates—even if they live on the wrong street.
9. A.I. can tell when you...uh...shouldn’t be driving.
Once artificial intelligence understands how Joe drives, it’ll know when Joe isn’t driving like himself. Embedded sensors and powerful machine learning techniques will allow insurers to identify impaired driving in real time—and maybe help stop an accident before it occurs.
10. A.I. will make price-by-route possible:
The days of “lump sum” insurance payments may be numbered.
As more information becomes available via smartphones, insurers will be able to charge a small fee for each trip—instead of charging a large sum once or twice a year. Buying insurance would be like paying for gasoline: buy it only when you need it.
Seem weird? Here’s a thought: this kind of system could make car insurance way more affordable for low-income drivers, for whom the cost of insurance may be manageable if they drive only when absolutely necessary.
That's good for the industry and good for the world. Not a bad combination.
So, yeah: the future of car insurance is looking pretty fantastic. And you can get the benefits of #8 right now by downloading the Root app and getting your first ever fair insurance rate. It takes seconds, and it's a revolution you definitely want to join.
Meanwhile, did we miss anything? Have some innovative, cool tech, entrepreneurial awesomeness to share? Come say hello on Facebook. We love big ideas. We're all ears.