Highlights:

• Consumers will be looking for ways to control their budget
• Usage-based insurance products will be an important tool on the backside of COVID-19
• Nationwide offers auto protection that maximizes consumers options

COVID-19 has changed life as we knew it from just a few months ago. Economic hardship, and uncertainty are causing consumers to take a hard look at their monthly budgets. This combination of emotions and financial strains could change the way they think about their auto insurance needs forever. According to a recent J.D. Power and Cambridge Mobile Telematics survey, 57% of consumers think their miles driven will remain lower for a significant period of time, and they’re nearly three times more likely to consider usage based insurance as a result.

“We expect the current economic environment and shelter in place provisions to accelerate interest in usage-based insurance,” said Teresa Scharn, AVP of Product Development for Nationwide. “Usage-based insurance programs, and the customized rates they can provide, are likely to become the insurance of choice for American drivers in the years ahead, and agents who can help their clients understand their usage-based options will have an advantage moving forward. Now is a great time for agents to have this conversation.”

Customization will override “one-policy-fits-all”

The days of the “one-policy-fits-all” approach to auto insurance are over, as consumer needs change, agents will be looking for carriers who can help them customize auto insurance coverage based on the unique needs of all the drivers in their household. One way to do this is to leverage Nationwide’s usage-based insurance (or telematics) programs, SmartMiles® and SmartRide®.

In the current economic climate, talking to your clients about usage-based insurance can strengthen retention and help them save money now. Customers who fully enroll in the program have over a 4-point higher retention at the end of the first term and over 1-point higher retention over the life of the policy. Drivers can save up to 40% in Nationwide’s SmartRide program, and the SmartMiles program gives low-mileage drivers more control over their insurance rates.

Building a plan that’s right for your customer’s family

For instance, consider this fictitious household—the Smart family, which includes three types of drivers shopping for insurance. One of the Smart parents commutes to work daily, averaging 60 miles each day. The other Smart parent prides themselves on safe driving, mostly running errands and trips not far from home. Their teenage child has been driving for a year, mostly to school and a local part-time job—the child will be leaving for college next year and not driving as frequently.

Leveraging Nationwide’s suite of options, their agent is able to customize a solution based on the Smart family’s unique needs, providing them the most control over their monthly premiums.

Smart family insurance:

The Smart teenager is a good candidate for SmartMiles, a mileage-based solution with a flexible monthly rate based on miles driven. The Smart parent with safe driving habits is an ideal candidate for SmartRide, which includes a discount based on safe driving as well as real-time coaching and feedback. The Smart parent commuting longer distances to work is well suited for a traditional standard auto policy.

Nationwide as a leader in policy customization

Nationwide can provide a range of options for a household to combine multiple coverage programs on one policy. As people are looking for ways to exercise more control over their monthly budgets, usage based insurance is going to become an increasingly important tool for agents seeking to advise their clients in this new economic climate.

“Even though some customers will require a rewrite, now is a great time for agents to proactively reach out to their clients and discuss whether or not usage-based insurance is right for them. It’s a way agents can try to help relieve some of the financial stress their clients may be experiencing,” Scharn added.

Click to learn more about SmartRideⁱ and SmartMilesⁱⁱ

ⁱSmartRide: Availability varies; program criteria differ in California. Stated discounts are approximations. Discounts do not apply to all coverage elements; actual savings vary by state, coverage selections, rating factors and policy changes. The enrollment discount applies during data collection; the final discount is calculated according to driving behavior and could be zero. The final discount applies at the next policy renewal and is subject to change based on actuarial support at subsequent renewals or with changes in drivers or vehicles on the policy.

ⁱⁱSmartMiles: Availability varies. SmartMiles includes a base premium plus a variable premium based on the coverages in force and the days and miles driven.