You can pay much less for car insurance…if you agree to have your car monitored. In the US, Tesla wants to revolutionize the world of insurance based on real-time analysis of driver data.
This is a little-known activity of Tesla: its subsidiary “Tesla Insurance”. Launched in 2019, it’s gradually rolling out in the US – not yet in France. Its peculiarity is that it completely depends on the individual behavior of the driver, at the nearest second.
Concretely, the amount of the premium fluctuates every month according to the “safety rating”, which is based on a whole set of parameters recorded in real time by the car: the number of sudden braking, collision start alerts, and also turning fast, respecting or not respecting the safety distances, depending on Driving only. The result is a score out of 100, the higher the higher, the less you pay.
With a bewildering promise: the average driver can save 20-40% on their insurance premiums. And up to 60% cheaper than traditional top drivers insurance. Another advantage of this new generation of insurance: no other criteria were taken into account, neither the age of the driver, nor his gender, nor any accidents he might have already experienced. Only the quality of driving matters. Quite objective criteria. Even if we could say that it calls into question the very principle of insurance: it contradicts the principle of aggregation of risks, which is one of the basic principles of insurance.
Driver behavior-based insurance already exists in France, right?
We call it ‘Pay As You Drive’ or ‘Pay As You Drive’, ‘Pay As You Drive’. It is very rare at the moment, even if many insurance companies have started offering it such as Allianz or Direct insurance. You are given a small box, a kind of snitch to hold in the glove box. But these devices mainly take into account the mileage: the less you drive, the less you drive, and some criteria such as driving flexibility.
Everything is supervised by CNIL. The arrival of connected cars, Tesla or others, is that they are computers on wheels, which collect a great deal of data. The car knows everything about its driver, which makes it possible to get a great view of its driving, and to adjust the price very precisely.
While waiting for self-driving cars, which will completely rearrange the cards, insurance companies will also adapt to this new situation. Some insurance companies have also begun to develop specific contracts.
About the same for health insurance?
It also takes us to a world where we will be more and more knowledgeable in order to pay less. This is true for the car, but it also applies to health insurance. Here we touch on a very sensitive topic. Today in France, the price of complementary health care cannot vary according to the behavior of the insured. The General Data Protection Regulation prohibits processing of health data. But until when?
In a world where we try to cut budgets where we can, it’s a solution like any other. In the US, some insurance companies rely on connected things: If I take enough steps during the day or run during the week, it will automatically lower my insurance rate.
Companies give their employees activity-tracking bracelets, discount mutual health insurance or offer them movie tickets or airline vouchers if they make good use of them. For companies, everything is good: employees are in better shape, savings. In the context of constrained purchasing power and accelerating inflation, the “earn a few euros for a little watch” deal can become increasingly popular with consumers.