Details on Toyota's Usage-Based Insurance Program
July 21, 2020—Toyota has been offering its customers a usage-based insurance plan since 2018. Proponents say that the model, backed by individualized driver data that's shared with the company, helps tailor plans and rates to each policyholder.
The insurance program partners with big insurance carriers on the plans, much like some other OEs do, with the automaker having control over the data flow.
In Toyota's case, the usage-based insurance platform is under the umbrella of Toyota Insurance Management Solutions. Another segment of the company, Connected Analytics Services, manages the data traffic.
Click of a Button
For ease of use, one of the initial features of this platform is that for owners of most newer models, the technology is already in the vehicle. Interested users would simply opt into the insurance program via an app or online.
Will Nicklas, Chief Operating Officer of Toyota Insurance Management Solutions, says that's one point where the tech has moved far past the OBD-II dongle or other insurance perks based on driver behavior.
“We feel like being able to offer that on the Toyota app, which is where the opt-in sits, is much more convenient than having to receive in the mail an OBD-II device, having to worry about plugging it into the car," he says. "Having to worry about it staying, falling out, all those things.”
A Toyota spokesman said that the company's connective technology was first in place for 2018 Camry models. It was then expanded to 2019 Camry and RAV4 models and is now on most 2020 model year Toyota vehicles.
At the heart of the usage-based insurance model is the use of data. Traditional insurance plans take into account a driver's age, address and driving violations. Nicklas says that connected vehicle technology allows for a much more personalized look.
“We can get away from those proxy metrics and look at directly how someone is driving," he says.
That includes habits like speed and acceleration, as well as hard braking. Toyota's online reference also says that the length of trips can play a part, too.
The bottom line, according to Nicklas, is that the data are richer for each driver, rather than the generalized statistics used in traditional plans. The connective technology also streamlines some of the collection processes.
“From an insurance company standpoint, its a lot easier for them to receive data directly, if you will, as opposed to having to worry about shipping out devices,” he says.
What About the Repair Shop?
Being more of a customer-facing platform, usage-based insurance shouldn't change too much about how shops interact with insurance carriers. Nicklas says that while customers can choose their repair facility, the insurance platform is a way for Toyota to be a helpful partner when the owner of one of its cars gets into a crash.
“I think that for the customer, they’ve got a choice in where they want to take their car to be repaired," he says. "From a Toyota brand standpoint, we certainly want to be there for them when they have any sort of need that’s associated with their Toyota."