Artificial Intelligence or AI enables machines to perform human tasks faster and more accurately. It keeps learning and correcting itself if needed with new inputs or experiences. The application of AI in auto insurance industry can bring disruptions in terms of processing real-time information. It can significantly expedite processes of calculating premiums of usage-based motor insurance plans, diagnosing accidental damages to vehicles, etc.
Benefits of Implementing AI in Auto Insurance Industry
Following are some major benefits that the auto industry can experience by adopting AI-enabled technologies:
- Easing Premium Calculation
In motor insurance policies like pay as you drive insurance and pay-how-you-drive plans, insurers determine premium amounts according to how customers use their cars. In a pay-as-you-drive policy, individuals opt for a premium according to the distance they usually cover. Similarly, in a pay-how-you-drive policy, insurers determine a premium according to the driving patterns/behaviours of their customers.
By implementing AI technologies, insurance companies can check customers’ past driving records, including the average distance they travel per year, lodged accidental cases, etc. This way, an AI-based algorithm can help in accurately calculating motor insurance premiums.
- Diagnosing Car Damages Remotely
Using AI-enabled technologies, insurance companies can diagnose the impacts of car accidents without manual inputs. They can remotely evaluate the car damages using real-time data fetched from sensors and cameras installed within the vehicle. It also lets insurance companies inspect accidental damages from videos and photos sent by customers. Gathering all these insights, insurers can process consumers’ claims quickly.
- Reconstructing Events of Accidents
Insurance companies can recreate accidental incidents through details or inputs collected from sensors and dash cameras. It can help them check the authenticity of their customers’ claims. Through this process, they can also ensure whether the policyholders breached traffic rules during the on-road mishap.
Barriers to Implementing AI in Auto Industry
Here are some of the barriers that can hamper the implementation of this AI-driven solution in the auto insurance industry:
- Implementation in Low-Range Vehicles
AI-driven solutions come from the data collected from sensors and dash cameras. However, only high-end cars come with all these features. Insurers can face problems while assessing the incident and diagnosing accidental damages of low-range or mid-range cars which do not have cameras and sensors.
- Data Security Risks
Motor insurance companies will have to ensure the protection of customers’ details collected for evaluating accidents. Breach of customers’ confidential data can attract a penalty according to Section 43A of the Information Technology Act of India. Such scenarios can damage their overall reputation in the market.
- Requirement of Skilled Professionals
Insurers need to hire professionals who are experts in handling new technologies. Additionally, they also need to train their existing professionals afresh so that they can properly leverage this advanced technology.
Besides learning the role of AI in auto insurance industry, you may also need to know the current procedures for calculating premiums and claiming the policy benefits.
Process to Calculate Premiums of Comprehensive Vehicle Insurance Policies
Insurance companies take into account the following aspects while calculating premiums of a comprehensive motor insurance policy:
- Type of vehicle
- Manufacturer
- Make and model of the vehicle
- Manufacturing year
- Fuel type
- Registration date
- State of registration
Insurance companies also let you estimate the premium using the virtual motor insurance premium calculator. Here are the steps you need to follow to use this tool:
Step 1: Enter your mobile number and vehicle registration number
Step 2: Provide the necessary details, including fuel type, make and model, etc.
Step 3: Choose a plan
Step 4: Mention your required personal details
After this, you can see the premium amount on this calculator’s result page.
Procedure to Make Damage-Related Claims
You have the option to claim the benefits of a comprehensive vehicle insurance policy in two different ways. You can either opt for a cashless claim or reimburse your expenses for repairing the car.
Following are the steps by which you can avail of the cashless claim of your car insurance policy:
Step 1: Inform your insurance provider about the accident and request the cashless claim
Step 2: Co-operate with the surveyor sent by the insurer. They will assess the damages and develop a report on the accident.
Step 3: Take your vehicles to a network garage of your insurance company
Step 4: Submit the claim form
You do not need to pay any amount other than the deductibles (if any) to repair damages that are included in the policy coverage.
Here are the steps you need to follow to request reimbursement:
Step 1: Register your claim by intimating your insurance provider directly or filling the online form by visiting its website and getting the reference number
Step 2: Inform the professional of the garage to make an estimated report about expenses after inspecting damages
Step 3: Repair your car and keep the original invoices
Step 4: Fill in the application form for the claim and attach those original invoices along with the required documents
After this, the insurance company will verify your claim and reimburse you the amount you have paid from your pocket, minus the deductibles, if any.
Adopting cutting edge AI-based technologies can assist insurance companies in accurately assessing insurance-related information. They can evaluate accidental damages and process their customers’ claims faster.