Technology innovations during the past decade have had a significant effect on the ease and convenience of day-to-day life, especially when it comes to driving and riding in cars.
Smartphone apps allow drivers to navigate from place to place without using antiquated roadmaps and travel atlases, or needing a GPS unit installed in their vehicles. Many vehicles are now equipped with technology to assist drivers who are traveling along more congested roadways, helping to avoid collisions or mitigate their impacts. Need a ride? Simply summon a car with a few taps of an app and a driver arrives within minutes to take you to your destination.
What vehicle owners need to know, however, is some of these revolutionary changes might affect their auto insurance rates.
“Apps like Uber and Lyft offer more transportation options for people who aren’t able to drive or choose not to. On the flip side, these apps offer vehicle owners a potential revenue stream,” said Kevin Quinn, Mercury Insurance’s vice president of claims and customer experience. “There’s a synergy for users on both ends, but for those who want to be drivers, traditional personal auto insurance policies weren’t written for this type of activity, so this is just one example of when you should consult your auto insurance agent to ensure you have proper coverage.
“The bottom line is if you plan to make any changes to your vehicle’s use or update anything significant that differs from how your initial policy was quoted, talk to your agent first.”
Here are a few items you should discuss with your agent.
- Vehicle software updates
Software updates for devices like computers and smartphones that are pushed over the air are commonplace – when bugs are detected or functionality improvements are available, users are prompted to download a new and improved version. Tesla has adopted a similar software update model but – for a price and without an automatic notification – goes a step farther by allowing its owners to add or enhance autonomous driving functionality on their vehicles! Its “Full Self-Driving Capability” package, which can be included when a Tesla is purchased or engaged at a later time as a software upgrade, includes features like automatic lane change, assisted parking and more. Be sure to inform your agent if you opt for the latter route to make sure you have sufficient coverage. And, while Tesla is currently the only manufacturer offering advanced driver assistance system technology as a software update, others aren’t far behind.
- Change in vehicle use
Today, earning some extra cash can be as easy as driving someone to the airport or dropping off someone’s egg rolls. Using your car for your side hustle – such as driving for Uber or Lyft, dropping off Postmates or GrubHub, or delivering Amazon packages – should be discussed with your insurance agent, as a standard personal auto insurance policy doesn’t cover these activities.
- Mileage changes
Say you use your vehicle to commute daily to a job, but now you telecommute a few times a week or found a job that’s closer to home. Let your agent know about your updated annual mileage – it may save you some money on your policy! Utilizing a usage-based insurance (UBI) program can be a great tool for measuring your actual commuting distance and can work to save you some more money based on your driving habits.
- Adding a new driver to an existing auto policy
Sharing a vehicle with a spouse, allowing your new teen driver to get behind the wheel or letting your roommate run a quick errand in your car are all commonalities in today’s world. However, the consequences of allowing a friend or family member to drive your vehicle without adding them to your policy can be dire – a claim can be denied if they get into an accident in your car, which in some states can also lead to a revocation of your driver’s license for failure to have proper insurance coverage.
- Aftermarket parts
Just like home renovations, making changes to your vehicle can affect your insurance. Changing out the stereo or getting new wheels are just a few of the aftermarket parts you can upgrade to customize your vehicle to be your own – just make sure your insurance reflects that, so your personalized ride can stay pimped (and covered) as you drive in style.
Changes like those above may happen between policy terms, but it’s also a good idea to review your insurance policy every year with your agent as you renew. Reviewing your coverage limits or qualifying for applicable discounts may save you money in your new policy. Discuss your options with your insurance agent to ensure that you’re getting the right coverage for the best price.