How IoT Can Transform the Insurance Industry

As you likely know by now, IoT has touched just about every industry in the world that you can think of. From fashion to cars to medicine, IoT is slowly transforming our industries and lives as we know them.

However, something we often do not think about or associate with technological advancements is the insurance industry. Even though it is not typically associated with the big and shiny tech advancements with IoT, it is an industry that impacts most people’s lives in some way.

So, how does IoT effect the insurance industry?

There are multiple ways that there will be impacts on all types of insurance, from car insurance to home insurance to healthcare.

Car insurance providers will have to adjust their car coverage when we are all driving cars that drive on their own. Home owners and renter’s insurance may change when homes are fully or mostly connected to the internet through smart home technologies. If all people one day are required to wear wearable health tracking devices, will this affect the quality and type of healthcare that people receive?

Car Insurance

IoT had already begun to make its way into the car insurance world. Many insurance providers are having their customers plug little devices into their cars or turn on an app while they are driving in order to determine how good or bad a driver is to provide them with customized car insurance rates.

The app or device collects tons of data from when the car is turned on and the person is driving. It then sends that real-time information back to the insurance company, so they can determine how safe of a driver the person is. For instance, they are checking to see how hard you break, if you swerve a lot, if you are stopping abruptly, or if you crash.

If you get a good driving score without many mishaps your insurance rate per month will cost less, but if they consider you an at-risk driver, your rates will be higher.

In the future, we can expect that cars may become fitted with a continuous IoT monitoring device that cannot be taken out or disconnected from. If all cars become self-driving, insurance rates may be affected as well.

Smart Home Insurance

In the future, we can expect that man home insurance companies will begin to work hand in hand with home insurance providers. Instead of home insurance providers simply helping their customers protect their homes and insuring against risk factors, they can rebrand to help smart homes with better home protection as well.

Companies can begin to offer their customers not just home insurance but smart home monitoring devices that. Help protect against theft, fires, carbon monoxide, and much more.

Health Insurance

Likely one of the biggest industries we will see IoT overtaking in healthcare and health insurance. It is estimated that by 2020, IoT in the healthcare industry will be worth over $61 billion.

In regard to health insurance, connected and wearable devices are being to be used for monitoring the health of patients. For example, if a person has heart disease or diabetes, they are likely to pay much more for health insurance than someone who is healthy and has no chronic illness.

However, if they are given a wearable fitness/health device that can track their health, activity level, and they can reach certain goals specifically outlined for them, the following year, they can get a better deal and lower premiums on their health insurance.

Tons and tons of information can be collected from these wearable devices. That information can be sent back to healthcare providers and insurance companies so they can provide customers with more customized and better health insurance rates that are more affordable and better quality.