In the insurance world, there is a surefire way to tell when a major storm is coming – and you don’t even need to look at the weather forecast! What happens is that insurance carriers issue a moratorium on binding new business policies when a storm or hurricane is 24-48 hours away from making landfall.
Why do insurance companies do this? In the same way that health insurance carriers exclude pre-existing conditions, property insurance carriers decline to insure buildings (and sometimes cars too) if the risk of loss is suddenly increased. This is understandable – otherwise, some people would only buy insurance at the last minute, when property damage from a storm or hurricane seems inevitable.
At the time of writing, many insurance carriers are not binding coverage due to the threat from Tropical Storm Imelda, which is currently deluging coastal Texas with rainfall. Thankfully, at this point, it’s not looking like becoming a major wind event, so the chance of you having to make a homeowners insurance claim is small. Flood insurance is another matter, and we recommend that every homeowner in the greater Houston area invests in this sensible – and usually inexpensive – coverage.
Insurance carriers are increasingly turning to technology to get a better idea of the risk profile of the customers they insure. One example, which is currently taking the auto insurance market by storm, is “telematics”. The exact details vary by carrier, but broadly speaking it involves installing a device in your vehicle, or downloading a smartphone app, which monitors your driving habits over a period of time (usually 90 days).
At the end of this period, insurance companies assess your results, factoring in your speed, how often you accelerate hard or brake sharply, and how often you drive in the dead of night when serious accidents are more frequent. Safe drivers who do not engage in risky behaviors see a reduction in their premium. Depending on the carrier, this can be as much as 20% off the entire premium. Be careful though, because several carriers INCREASE premiums for risky drivers, so it pays to chat to your friendly independent insurance agent to find out if telematics programs are a good fit for you!
The video above explains a little about Travelers’ telematics product, called IntelliDrive and launched in late 2018. Safeco (“Right Track”) and Progressive (“Snapshot”) also have similar products which differ in a few details.
Worried about data harvesting? Don’t be. These devices or apps glean only information directly relating to your driving habits. People worry about being “monitored”, but this fear is misplaced ……. if you own a smartphone or engage in any kind of social media, your data is already being used in far greater depth than with any telematics device.
For safe drivers, getting on a telematics program is a no-brainer. It is also the way of the future – by 2025 it is estimated that the vast majority of auto insurance premium calculations will be entirely or mostly telematics-based.