AI and usage-based insurance for cars: The future of third-party coverage?

There are many innovations in the world of motor insurance, AI and usage-based insurance (UBI) being two of them. Third-party car insurance is very common and many vehicle owners opt for this type of coverage. Hence, the insurance industry is constantly striving to improve these products. With the introduction and assistance of AI and UBI, many new avenues are waiting to be discovered.

Ways in which AI and UBI are helping third-party car insurance

UBI greatly depends on telematics, which in turn depends on AI, to retrieve data related to third-party car insurance online. Once the data is collected, assistance is provided in the following ways:

Helping the insurance providers

When an insurer sells insurance for cars, they have to do a lot of research and collect data about the customer and the vehicle to correctly underwrite the risks. This is an area in which AI proves to be very handy. All the work is done digitally, with the help of AI and this allows the insurer to get the work done quickly and accurately.

Helping the riders

The riders also benefit from UBI and AI. There are many technologies that, with the help of AI, predict accidents and dangers on the road. The rider is alerted about impending dangers, which helps to prevent an accident. Not only does this reduce the need for a car insurance claim, but it also keeps the rider and his vehicle safe.

Helping the policyholders

AI helps the policyholders with various aspects of the coverage. AI-based chatbots assist customers on matters related to the insurance policy such as renewals, complaints, claims, etc. This makes it quick and convenient for the user and also very handy for the insurance provider.

Transfer of data through telematics

Telematics refers to the technology that relates to long-distance data transfer. This happens instantly and helps the insurer keep track of the policyholder’s riding habits. Real-time data is collected and transmitted to the insurer about the policyholder’s car riding skills, minor accidents, etc. This data helps the insurance provider in underwriting and determining the correct premium for the insurance coverage.

Working with human intelligence

AI works with human intelligence to create a flawless system with minimised errors and improved services. This creates a very powerful tool to improve the entire working of the insurance industry and it ultimately benefits the customers who rely on third-party car insurance plans.

In conclusion

The implementation of AI and usage-based insurance (UBI) in the motor insurance industry is proving to be very helpful for everyone associated, from the underwriters, insurance company bosses, agents, and insurance employees to the policyholders. This trend promises to hold many benefits for the industry in the years to come and aid the insurers and users in various ways.