Why is auto insurance not covering this?
Insurers and the industry are struggling to keep pace with demand for car insurance.
Photo: Rob Homer Insurers are also struggling to provide a robust data platform for their customers to access data and monitor their coverage.
They also are not keeping up with rising costs.
Insurance industry consultant John Macdonald said it was a “major problem” that the industry had “no clear strategy” to make car insurance more cost-effective.
He said that with the “increasingly fragmented” insurance market, insurers were not “relying on a single data platform” and “are having to create their own data platforms to help them manage the growing complexity of the system”.
“I would imagine most insurers are trying to be as efficient as possible and that means building their own proprietary platform,” he said.
“It is very much like a web service, it is not really a platform.”
Mr Macdonald recommended a “better and more agile” model of insurance where insurers could access data from third-party companies like insurance industry software.
The National Insurance Institute said it had been working with the industry to identify a “tough” and flexible solution.
“The challenge we face is that insurance companies are still not sure what their data platform will be, whether they will have the technology to support it, and what it will look like,” NII’s chief operating officer, Mike Gorman, said.
“We will continue to work with the insurance industry to find a solution that is more flexible, secure and cost-efficient.”
The National Automobile Insurance Association said it would continue to push for “a comprehensive and robust insurance industry data platform”, but that it would be a “difficult, protracted and expensive process”.
The Australian Automobile Association said that while its members were working with insurers to develop a solution, the “urgent and critical” issue of making the data available to insurers was “remaining a challenge”.
“Insurers are not yet in a position to collect data and deliver on this, so we need to work together to make that happen,” AMA chief executive officer, Geoff Brown, said in a statement.
“That is why we have been pushing for a comprehensive and rigorous insurance industry platform, which includes a secure, scalable data platform, and a transparent and open process.”
The Insurance Institute of Australia said it hoped to deliver a solution to the problem by the end of the year.
“This is a major problem and we must work together with the insurers to tackle it,” chief executive Greg Hinchliffe said.
The Australian Insurance Institute is an industry body with the sole objective of providing the highest quality, affordable and reliable insurance coverage.
It is a member of the Australian Insurance Association.