Pay-per-mile and usage-based insurance (UBI) products are on the rise. More and more auto insurance businesses calculate premiums based on a policyholder’s driving behavior. This means tracking a driver’s mileage, location, time-of-day driving, acceleration, braking, and more. While industry professionals agree that mileage is an important risk factor that influences pricing and underwriting, there is less agreement about other factors. Let’s take a deeper look into time-of-day driving.
Night-time driving does not equal day-time driving
The difference between driving at dark and driving by daylight is literally night and day. At dark, drivers face limited visibility, making it harder to see road signs, other vehicles, and pedestrians. Construction sites are more likely to be active during the night hours. Unfortunately, there are also more drunk drivers on the road at night-time.
That said, time-of-day has a large influence on a driver’s experience. But why should insurance providers care?
Almost half of fatal accidents happen at night
Insurance providers should care, because night-time driving is significantly riskier than day-time driving. According to the NHTSA, 49 percent of fatal car accidents occur at night, although only 25 percent of total traffic occurs during those hours. Hence, the fatality rate per vehicle per mile is three times higher at night than it is during the day. This makes time-of-day driving an important risk factor for insurance companies. Knowing when policyholders drive is just as insightful as knowing how many miles they drive.
How to monitor time-of-day driving
Monitoring day-time vs. night-time driving is easier for some insurance businesses than it is for others. Some companies are already using aftermarket hardware or their policyholders’ smartphones to report all kinds of driving behavior. Others are not yet using vehicle telematics or smartphone technology, but are instead letting policyholders self-report their annual mileage.
Vehicle telematics made easy
Is your insurance business currently asking policyholders to self-report their mileage, and would you like to start monitoring time-of-day driving as well? Smartcar offers a simple solution for you. Using our API technology, your company can start automatically verifying mileage and tracking night-time driving as well. Our pure software product brings a number of benefits:
- Ease of use: Your customers can link their cars to your insurance app with just a few clicks. No aftermarket hardware or smartphones needed.
- Cost efficiency: Smartcar offers simple SaaS pricing. You won’t need to spend money on expensive hardware that need frequent software updates.
- Accuracy: Our API communicates directly with the 3G or 4G telematics modem in each vehicle. There is no risk of faulty installations or dead smartphone batteries.
- Privacy first: Smartcar lets you access mileage and time-of-day driving with user content and no invasion of privacy.
Respecting consumer privacy
Let us elaborate this last point a little further. While UBI products are becoming more and more common, transparency and privacy concerns are getting stronger and stronger as well. Policyholders are hesitant to constantly share their location with insurance companies. They don’t want to disclose their every movement, including when they accelerate and how strong they brake.
Smartcar offers the first and only solution that lets you do both - track important driving behavior such as mileage and night-time driving and protect your policyholders’ privacy. Our advanced technology lets insurance providers monitor mileage and time-of-day driving by reading a vehicle’s odometer and logging timestamps - no location services needed. Our transparent onboarding flow shows policyholders a detailed list of permissions (e.g. read odometer, read VIN, or read fuel tank level), which they can choose to accept or deny. This way, your business can gather accurate information and calculate risk without compromising consumer privacy and transparency.
No matter whether your insurance business is new to vehicle telematics, or whether it already offers UBI products, Smartcar allows you to easily monitor mileage and night-time driving, all the while minimizing privacy concerns.
If you have any questions or would like to request a product demo, please don’t hesitate to contact us. Our Sales team is happy to help!