Part of being a broker is explaining to our customers how our carriers develop the rates they charge their customers. For decades the rates have been based on the following:
-Driver age & experience
-Vehicle use (ex Work, pleasure)
The industry has since then made changes and more refined ways have been created to establish prices. Companies have now sought out ways to enhance classifying drivers.
The new age of telematics & GPS tracking
Some companies have implemented voluntary programs that include portable data recorders. These recorders are installed into vehicles for data recording. Some examples of the data that is collected by using these devices are:
-Times of operating the vehicle
This system allows insurance carriers to create rates that exhibit a drivers potential for loss. Portable data recorders could potentially separate superior drivers from the poorer risk ones.
Another tool used in this developing underwriting process is GPS tracking. However many have concerns for privacy with this method. In fact several states have implemented laws limiting the use of such information.
The insurance industry will continue to expand with different ways to establish pricing. VRP would like to know our consumers view on these new approaches.
If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com
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