Consumers value privacy more than potential savings when purchasing insurance

A recent survey by Policygenius explored consumer sentiment toward new tech being deployed by home and auto insurance companies.

The survey found that most consumers prefer being able to talk with an actual human and are wary of fully automated insurance decision making. 72% of consumers said they would be uncomfortable purchasing insurance without speaking to a human being, and 64% would be uncomfortable filing claims on a website or app without human interaction.

Claim reviews by artificial intelligence was a sticking point for many: only 17% of people were comfortable with the idea of their home, renters, or auto insurance claims being reviewed exclusively by artificial intelligence, and almost 60% said they would rather switch insurance companies than let artificial intelligence review their claims.

Consumers prefer privacy over savings

The survey also found that consumers value privacy more than potential savings. 58% of drivers said no insurance discount was worth using an app that collected data about their driving behavior and location. Among the 43% of drivers willing to use this type of app, 74% said they would only use it if it lowered their rates by more than half.

Privacy concerns extend to home and renters insurance savings potential as well. 32% of respondents said they’d be willing to install a smart home device that collected personal data, such as doorbell cameras, water sensors, or smart thermostats, even if doing so reduced their home or renters insurance rates by more than half. 57% of respondents felt no discount was worth using these devices and ultimately giving up privacy.

“We’re seeing home and auto insurers integrate various data collection and analysis technology into policy distribution, pricing, and claims, but it’s clear consumers aren’t readily willing to trade personal data, or give up the human touch for marginal savings,” Pat Howard, property and casualty insurance expert at Policygenius, said.

“Some companies use technologies like usage-based auto insurance and artificial intelligence in their pricing and payout processes, but you can’t easily put a price on consumer peace of mind.”

Consumers wary of data-rich big tech companies

The survey also found that consumers are wary about the prospect of data-rich big tech companies expanding into home and auto insurance.

67% of respondents said they wouldn’t be comfortable with a major tech company like Amazon insuring their home or car, and 40% said it would make them very uncomfortable.

Additional findings

• 43% of policyholders would agree to let a drone evaluate their property as part of a home insurance storm damage claim, even if it led to an expedited insurance payout.
• 67% said that no home or renters insurance discount would be worth installing a smart doorbell camera that shares facial recognition data with third parties. 24% of respondents said they would agree to this even if it cut their insurance bill in half.
• 66% of consumers between 25 and 54 years of age said they were uncomfortable purchasing insurance online without talking to a human, and 78% of consumers over 55 felt the same.