7 telematics myths vs. reality
Telematics can be a prime selling opportunity and the best solution for consumers who are looking for easy ways to manage their costs.
Consider these facts:
- Consumer interest in telematics grew by 30% in 2020 with no signs of slowing down
- Nationwide’s latest Agent Authority research1 shows that more customers are ready to give telematics a try than ever before
However, if you’re not familiar with telematics, the selling process can feel a bit daunting or confusing. Nationwide’s latest Agent Authority research has uncovered some common misconceptions – or myths – about telematics.
Myth #1: Customers won’t consider telematics because they believe rates will go up.
Reality: Nationwide uses data to help people learn to be safe drivers, not surcharge them.
And there is no additional charge to participate in the various usage-based insurance programs.
Check out these stats:
- Only 10% of consumers reported currently using a telematics device, but 65% are open to it if provides a discount.
- 87% of business owners agree: The benefits of telematics outweigh the financial cost.
- 93% of middle market fleet owners said they would be willing to pay more to ensure a safer driving experience.
Myth #2: I’ll be flooded with customer questions.
Reality: If you sell Nationwide telematics, step-by-step instructions will arrive to the customer in 10 days or less after signing up for a telematics program.
Additionally, Nationwide provides resources (including additional information, videos and FAQs) for both personal lines and commercial customers to help answer whatever questions they may have.
Myth #3: Telematics privacy concerns prevent customers from considering usage-based insurance.
Reality: Nationwide is committed to protecting customer data and NEVER sells this information to third parties.
- 73% of consumers said they would share driving data if it provided a discount.
- 65% of consumers were interested in an insurance policy that tracked and charged by the mile.
Myth #4: Telematics complicates my sales process
Reality: Nationwide makes it easy to place customers in the best program for them, and it’s easy for them to activate.
Quickly determine whether customers are a good fit for telematics by asking these simple questions:
- Are you a low-mileage driver?
- Are you interested in being rewarded for safe driving?
- Would you like insights into how your employees are driving your company vehicles?
Myth #5: Telematics is solely for saving money.
Reality: Although that is a very real and attractive feature, business owners cite top advantages of telematics as having the ability to:
- Evaluate driver behavior
- Preemptively identify vehicle maintenance needs
- track vehicle locations
Myth #6: It’s for individuals or middle market fleets — not small businesses.
Reality: Reducing distracted driving is a good thing for anyone on the road — including small business vehicles. Think of it as big technology for small business.
Vantage 360 Fleet is a free telematics offering for small businesses. It’s an easy way to manage fleet vehicles and monitor routes and driving activity. If we aren’t already in your state, we’ll be there soon.
Myth #7: I feel behind on the industry. What if I’m unprepared to advise?
Reality: You’re not alone. Only 60% of agents feel knowledgeable enough to speak about telematics.
The good news is, Nationwide has a wealth of resources to give you a boost with personal lines, small commercial and middle market telematics programs.
Telematics presents an enormous selling opportunity for agents.
Think of all the times you’ve heard people complain about how they’re penalized for others’ bad driving habits. Or complaints from those who rarely use their cars and still have to pay “full price”. Telematics can easily be the right solution for these consumers.
Don’t miss out – get in the habit of offering the telematics solutions to your clients today.
Sources and Disclaimers
These and other important insights came out of the 2020 survey of the Agent Authority research series conducted by Nationwide, which includes samples of independent insurance agents, small business and mid-market business owners, and consumers.
*SmartRide, SmartMiles and Vantage 360 Fleet are at no additional charge to Nationwide auto and Nationwide business auto policy holders. Vantage 360 Premier Partner for Nationwide business auto customers is subsidized by Nationwide for the first year.