CNC Insurance, Delaware Business Insurance Update: Usage Based Insurance, Real or Fad?

Progressive Insurance has announced that it will license off  it's usage based insurance technology. This will allow other companies to develop insurance products where premium is paid based on usage. The best example of this is car insurance. The little sensor that plugs into the car basically calculates your premium based on monthly usage. Pretty cool, right? This will also work wth trucking fleets or businesses with a large schedule of vehicles. The business owner that has a vehicle out of service for repair, can be assured they will not be paying the same premium rate as the other vehicles that are on the road. This concept could work with equipment policies and inland marine coverages. How this can be adapted to other products remains to be seen. For example, one of the biggest problems with general liability coverage is it's basis for premiums. If you are a contractor and you give your employees bonuses at the end of the year, you will be charged additional premium on your general liability.  The insurance company is getting money for literally no risk. This may be a area where usage based insurance can be utilized. It will remain to be seen how it plays out but certainly I believe that usage based insurance products are here to stay. until next time be careful out there and know your risks. K
G. Kevin Nemith, Business Insurance, Small Business Insurance, Enterprise Risk Specialists , serving
DE, MD, PA, NJ, & VA.
www.cncinsurance,com
www.bizinsurancetv.org

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