Telematics proved how to calibrate miles into money, and now, smartphones will pay for themselves for the consumers who wield them.
Costly and privacy invading tracking systems installed in a car computer, mated to a vehicle port with a “dongle thingy”, or ghosting a cell phone’s reception turn for turn serve a lot of practical purposes, but they are complete overkill and waste of money for verifying odometer readings.
Consumers who drive less are set to explosively benefit from the hard and expensive progress which telematics has created. The last decade of telematics pilots and trials have eked out single digit adoption rates among consumers who have submitted themselves to the process. The new normal springs from this suffering though, and it embodies a formal way to price traditional distance-based insurance into small increments of miles used by a consumer. Usage based insurance for the mass market is here.
Instead of no low miles discount or a simple small percent reward for driving less than 7,500 miles a year, now a lower miles vehicle will be rewarded dynamically with potentially lower costs for every mile less they drive. The same person who drives 5,000 miles a year now might get more than a 30% discount where under the old system perhaps barely a 10% discount might have been offered if a program was even offered.
In many states, miles are not now used in rating, or if they are, they may have some heavy handed measuring devices imposed on the few drivers who opt in for that sort of snooping. Time is up for experimenting with gizmos, “drive less, pay less” is the in the now mantra.
Consumers with lower miles can verify their actual readings on a timely basis by simply taking a picture with their smartphone. A smartphone application will help the consumer not only remember to take the pic, but will help them shop for insurance by alerting them to when carriers in their state pay more for those customers who drive less.
Marty Ellingsworth is the President of Salt Creek Analytics which has developed a patent pending solution called Fresh Miles™ for helping consumers mind their miles and maximize their discounts.