3 Examples of How Telematics Can Aid Insurance Claims Handling

While information derived from usage based insurance telematics hasn’t been fully utilized in the claims process, the benefits it can provide – consistency, efficiency and accuracy – offer a way to reduce claims costs.

David Lukens, LexisNexis director, says telematics is considered an accurate way to predict loss costs and insurers in Britain have already implemented telematics information as the first notice of loss. Most U.S. insurers have some form of telematics program in pilot mode at the very least, according to Lukens, who is no stranger to the claims process having previously managed claims operations at AIG.

Lukens was speaking at the recent Safelite Solutions’ Annual Customer Experience Conference held in Chandler, Ariz., on how claims can embrace telematics.

Since many companies already have telematics programs in place but aren’t using the data for claims yet, he recommended insurers begin now when data is small because it is easier to manage. It’s also easier to integrate new pieces of data slowly.

Outside of the U.S., every LexisNexis client using telematics data in its claims processing is experiencing significant savings, said Lukens.

As an example, when an accident happens, the information is transmitted back to LexisNexis. The information is then used as a first notice of loss (FNOL). A message alerts the carrier of the insured’s accident. The carrier can then reach out to the insured and send help to the scene. In fact, to avoid bandit tow trucks, the insurer can dispatch a tow truck to the scene and mitigate the possibility of high tow and storage charges.

The insurer can also expedite repairs by having the car moved quickly from the scene and even dispatch a rental car to the scene. This, according to Lukens, provides a “phenomenal customer experience.”

Telematics provides a great amount of data initially for the adjuster to process the claim. This data typically includes weather details, time, date and location of crash, speed and direction of travel. Lukens said this reduces the time it takes to collect the information piecemeal. As a result, an adjuster can decide liability and compensability more quickly.

Not every telematics incident reported is an actual accident – there can be false positives if, for example, an insured driver hits a speed bump too quickly. For every four calls, one is a real accident, said Lukens. But eh said insurers don’t necessarily mind as it gives them a chance to reach out to insureds.

Lukens offered a few examples where telematics data assisted in claims investigations.

Johnson is editor of ClaimsJournal.com, where this article was originally published.