Technology plays a remarkable role in the automotive insurance sector. The automotive insurance companies are always in need of huge volumes of data. They require it to create upgraded products and tailoring them as per their customer’s needs. The extensive reliance on data and analysis often makes it difficult for the service provider to keep track of things. Every day more than hundreds and thousands of accidents and thefts are taking place throughout the world, which means dealing with hundreds and thousands of license plates, dates, and financial figures. The amplifying automobile sector can make this situation worse and complicated. Besides, the increasing number of rivals in the automotive insurance sector drives the service provider’s need for staying updated with information, always. This is where Big Data enters the field. Big data and analysis are gradually becoming the necessary tool for designing useful and improved products and services. The incorporation of Big Data enables better handling, managing, organizing, and tracking of data. Moreover, the analysis done by this tool curbs the need for additional manual efforts, hence the service provider enjoys cost cutting. Instances could be seen where the tool automatically adjudicated a case and made settlements on the basis of the volume of loss incurred. Furthermore, with surging volumes and rate of data being generated every day, very soon, data scientists will be in high demand for the automotive insurance sectors.
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Augmenting Demand For Vehicles
The global automobile sector has been witnessing a continuous growth over the past few decades. The expanding population of the world is one of the key factors responsible for the surging growth of the sector. Along with the increasing population, the supply and demand of goods is also rising which in turn is affecting the purchasing power of people in a positive way. The improved hospitality and travel services encourage people to go for weekend getaways very often. Additionally, people’s preference for a comfortable lifestyle has always played a predominant role in driving the global automobile sector. However, with the increase in number of vehicles hitting the road every year, the chances of accidents intensify substantially. Accidents are unfortunate. It’s not within the control of a person to prevent an accident, which is why it is termed as accident. It is sudden and destructive. No matter how much an individual tries to stay cautious on road, there are people driving or walking on the same road who pay least attention to safety. Despite the ‘don’t drink and drive’ messages being circulated worldwide, there is always a certain percentage of people who are found behind the bars for breaking the rule. Besides, the expensive auto parts have a separate black market where illegal transactions of stolen auto parts are carried on. So, having a vehicle these days is no less than a headache.
Ouch! An Accident
Although accidents can’t be prevented but the loss caused by them can be curtailed somehow. Thanks to the auto insurance companies mushrooming of late. Auto insurance is the contract between the car owner and the insurance service provider. This contract comes with clauses, terms, and conditions assuring protection of the vehicle in case of accident or theft. Auto insurance follows the business model of the life insurance service providers. Here, the vehicle owner agrees to pay a definite premium to the auto insurance company every month. In exchange, the auto insurance provider takes up the entire responsibility of the wellbeing and safety of the vehicle. The premium is the price paid to the insurance company for safeguarding the vehicle from losses and thefts. Automotive insurance extends the coverage for liability (physical damage), medical (rehabilitation and injury cost), and loss of property (theft or car damage).
What other types of auto insurance coverage are typical?
While most basic, legally mandated auto insurance covers the damage your car causes, it does not cover damage to your own car. To cover your own car, you should consider these optional coverages:
Collision reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even getting hit by an asteroid!
Glass Coverage provides coverage from windshield damage, which is common. Some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.
Insurance Types
Based on the variety of needs of the vehicle owners, the auto insurance companies have come up with a gamut of schemes suiting their requirements. The most popular options include gap insurance, collision insurance, rental reimbursement collision, comprehensive insurance, uninsured motorist insurance medical payments coverage, and classic car insurance. Out of these, the classic car insurance is the mandatory auto insurance one should take up at the time of purchasing the car. The coverage mainly comprises third party liabilities and accident benefits. The losses arising from accidents are generally beyond the affordability limits of the owner. Most of the individuals do not have enough money available to absorb and recover from the shock of theft or accident. Hence, several government initiatives direct the owners to get an insurance done through third-party liability coverage arrangements. Accident benefits enable the owner to avail services for income replacement, treatment and similar benefits. This has been designed basically to provide support and recovery to a person who has been injured in an accident. The coverage even encompasses the provision for arranging funeral and paying to the legal heirs in case the individual is killed in an accident. In several countries, these benefits are termed as “no-fault benefits,” which implies that the insurer is paying for the losses regardless of the person who was responsible for the accident.
Conclusion
Vehicles are priced possessions for most of us. People save money, limit their fun activities, and then buy a car. Cars, just like properties, is an investment. It is an asset which is often created for ensuring a secured future. However, accidents are mishaps that cannot be avoided. It is a part of daily life. Similarly, things being stolen is also a bitter part of our lives. There exists no guaranteed protection from such mishaps. Thankfully, the automotive insurance sector has come to the rescue of the car owners. The expanding population across the world has been significantly responsible in surging the sell of cars. With increased sell of cars, the need for automobile insurance has been felt strongly and the demand for the same has witnessed sharp rise over the years. Automobile insurance providers incur the losses caused due to an accident or theft. This relieves the car owner from getting into further trouble. In the recent times, technology has been playing a crucial role in managing, preserving, and fetching data as and when required. Big Data has proved to be a blessing for the insurance providers, and it has been a leading trend in the automotive insurance sector of late.
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