Auto insurance industry to start issuing a third wave of cards in 2019
Auto insurance companies say they will start issuing third-wave cards next year and expect to hit a million customers.
The cards, called Future Insurance, will offer consumers the option to buy insurance through a third-party.
The first wave of the cards is expected to be issued in 2019.
The company that will be the primary issuer of the future cards, a Canadian company called Horizon, expects to issue 100,000 to 200,000 cards this year, said spokesman John Millington.
“We’re looking forward to seeing what our customers do with this product,” he said in an interview.
Millington said the new cards are aimed at young people.
“They’re trying to do something that they never thought they’d have to do, they never imagined they’d be able to do,” he added.
Future Insurance is the first insurance company to begin issuing third wave cards.
Millingtons main goal is to encourage younger customers to buy cars and to make it easier for them to buy the insurance they need.
There will be no premium tax on the new cars or on the existing cars purchased by the new customers.
Insurers have been struggling to keep up with the exploding demand for insurance.
Premiums for most insurance have not kept up with inflation.
Insurers are facing an explosion in demand for health insurance, with the number of Americans without health insurance now at nearly 17 million, according to the government.
The U.S. Department of Health and Human Services (HHS) expects insurance premiums to rise by more than 40% next year, a sharp increase over 2014’s 4.9% increase.
The new premium taxes are expected to raise more than $1.5 billion for insurers and reduce consumer spending by as much as $1 trillion over the next five years, according the Insurance Institute for Highway Safety (IIHS).
“They’ve been under pressure from the Affordable Care Act and we’ve been pushing them to do this,” said Richard Hirsch, IIHS senior policy analyst.
“I think the fact that they’re finally responding to that pressure and the pressure they’re getting from the insurance industry is encouraging.”
Hirsch said consumers should be prepared for the increase in premiums.
“It’s just the right time to be doing that,” he noted.
“The insurance industry has been trying to figure out how to handle it for the past year or so.”
The new insurance cards will be issued under a new set of rules that will make them cheaper and more affordable than traditional insurance.
They will be sold through the federal insurance exchange and will be subject to annual renewal.
The insurance companies are expected the most customers will buy their new insurance through the online marketplace, but some are also looking to partner with online insurers.
Hirsch also expects the new insurance to be more convenient for customers.
“People have been asking if they can buy it online and it seems like they’re going to be able,” he explained.
“You’re going on a website and you’re going through an online marketplace.
It’ll be a lot easier for people to get into the insurance business.”