10 Emerging car insurance trends to look out for

Picture of Written by <a href="https://rateretriever.com/about/katie-dee/"><span style="text-decoration: underline;">Katie Dee</span></a>

Written by Katie Dee

Picture of Edited by <a href="https://rateretriever.com/about/alyssa-dicrasto/"><span style="text-decoration: underline;">Alyssa DiCrasto</span></a>

Edited by Alyssa DiCrasto

Last updated October 4, 2024

The car insurance industry is a constantly evolving and innovative space. For consumers, it can sometimes feel impossible to keep up with all the new technology and coverage options available. That’s where we come in.

Staying in the know is one of the best ways for you to save money on your car insurance premiums, so we did the leg work and compiled a list of the most prevalent emerging insurance trends for you.

1) Usage-based insurance (UBI)

This is a type of car insurance that uses data about your driving habits to help personalize your premium. UBI looks at aspects such as how many miles you drive, when you drive, and where you drive, as well as safe driving habits like how fast you drive and how you brake and accelerate in order to assign you a rate that more accurately reflects your driving habits.

Find cheap car insurance near you

Oops! We could not locate your form.

2) On-demand car insurance

This type of insurance works best for drivers who need coverage but don’t need it for a full year (the length of most traditional policies). It allows you the flexibility to pay for coverage when and how you need it.

3) Pay-per-mile insurance

Pay-per-mile car insurance allows you to pay for coverage based on how many miles you drive. This kind of insurance could be right for you if you need coverage on a car that you don’t drive regularly because it could help to save you big on your rates.

4) AI and automation

Insurance companies have started to integrate AI technology into their claims processing, customer services response, and risk assessment. This technology allows insurance companies to more quickly and efficiently handle repetitive processes and answer routine questions. This is a benefit to you because it helps to improve customer services such as getting your questions answered quickly and speeding up the whole claims process.

5) Advanced safety features

As driver-assistance systems in vehicles get more and more advanced, a lot of insurers have started offering discounts for drivers with cars that include these features. This encourages people to choose safer vehicles in order to save on their insurance rates, even if the vehicle itself might be more expensive up front.

6) Electric vehicles

As electric vehicles (EVs) gain popularity, insurers are adapting their policies to cover specific risks associated with EVs—like fire and electrocution. Insurance providers also may offer incentives for eco-friendly vehicles.

7) Predictive analytics

Insurers are leveraging predictive analytics to assess risk profiles and improve underwriting processes. The goal here is to more accurate set rates based on individual driver behaviors and conditions. Ideally, this will make car insurance fairer as well.

8) Regulatory changes

Evolving regulations regarding data privacy and insurance practices are impacting how car insurance providers collect and use consumer data, increasing price transparency.

9) Connected Cars

As vehicles become smarter and more connected, the risk of cyber threats has increased. Because of this, insurers are starting to develop policies that address potential cyber vulnerabilities in connected cars.

10) Smart Contracts

Smart contracts are self-executing agreements that can automate different tasks in the insurance space. They are changing the way insurance companies go about policy enforcement, policyholder interactions, fraud prevention, and more.

Frequently asked

What factors affect your car insurance rates?

There are dozens of factors that affect car insurance rates. Some of the most notable factors are your location, age, gender, credit score, driving record, claim history, vehicle type, coverage limits, coverage types, and deductible. Additionally, the car insurance company you select can affect your car insurance premium.

Does your lifestyle affect your car insurance?

There are several lifestyle-related factors that can impact the cost of your auto insurance policy. For example, if you have a long commute to work or take road trips frequently, you might pay more for car insurance than someone who drives less often. Similarly, if you live in a city or urban area, your rate might be higher than someone who lives in a rural area. However, factors like your job, hobbies, or health don’t have any impact on your car insurance.

How does where you live influence the cost of auto insurance?

Where you live has a significant impact on the cost of your car insurance policy. Insurance companies look at things like the severe weather risks in your area, the rate of vehicle thefts in your neighborhood, the number of uninsured drivers in your location, and the cost of car repairs and labor. If you live in an area with few risks, you will probably pay less for car insurance.

Share this article