As an alternative to self-reported mileage and aftermarket hardware solutions, more and more insurance companies have started using their policyholders’ smartphones as a tool for tracking and verifying mileage information. Here is why this popular solution is problematic, and which route your insurance business can take instead.
Tracking mileage with a customers’ smartphone
At first sight, using a smartphone for mileage verification sounds favorable. Policyholders download an app and set their location sharing to “always.” From here on, the phone’s accelerometer and location services are doing the magic. The phone detects the start and end of a trip. It then calculates driven mileage based on the phone’s continuous location data.
The problems
As simple and convenient as it may seem, there are numerous problems with using smartphones to track vehicle mileage:
- Inaccuracy: No matter how advanced the technology, smartphones always report mileage data with a certain degree of inaccuracy. The reason is simple. Phones can’t access a car’s true odometer reading, and inferring mileage from location data merely leads to an estimate. Phones can also fail to capture the start or end of a trip, and they can even erroneously report a trip, while the policyholder is actually riding in an Uber or taking the bus.
- Unintentional failure: Beside the mentioned technological failures, human error and leniency add to the problem. From time to time, policyholders forget their phones at home. Phones can also run out of power during the middle of a trip, due to the constant use of location services in the background.
- Intentional fraud: When the failure to report mileage is not accidental, we are facing blatant mileage fraud. Before going on a long trip, some policyholders intentionally disable location services, uninstall the insurance app, or simply turn off their phones. Now, the insurance provider has no way of capturing the policyholder’s trips, until the policyholder turns their phone back on, re-enables location services, or re-downloads the deleted app.
- Privacy concerns: Finally, with the rise of privacy concerns across many industries, some prospective customers are hesitant to commit to an insurance policy that constantly accesses their location and reports every trip they make.
Tracking mileage without a customers’ smartphone
That said, smartphones aren’t the best way to report and verify car mileage. We at Smartcar have given this topic a lot of thought, and we’ve worked hard to develop a solution that solves all of the mentioned problems in one go.
The solution
Smartcar’s mileage verification solution uses API technology to let insurance businesses do the following:
- With just a few clicks, Smartar lets policyholders link their cars to an insurance app.
- For maximum transparency, the insurance app lets policyholders accept or deny a detailed list of permissions (e.g. access a vehicle’s odometer reading, location, or VIN).
- The insurance provider can now automatically access the policyholder’s true odometer reading every month, every year, or however often they need to.
As our API communicates directly with each vehicle, there is no need to constantly monitor location data, or to estimate and calculate mileage based on other information. Smartcar is the first mileage verification solution that eliminates the risk of inaccuracy, failure to report, battery drainage, fraud, and privacy complaints. Our product does the heavy lifting and simplifies mileage verification, so that insurance providers can focus on what’s important: successful underwriting, a growing customer base, and increased profits.
Are you wondering how Smartcar caters to your insurance product? Would you like to learn more about our product or schedule a demo with our sales team? Feel free to reach out to us. We’ll be happy to assist!
