Artificial intelligence is taking the insurance industry by storm. As the way Nevadans drive changes with the advent of ride-sharing businesses and driverless technology, the ways that insurance companies provide insurance services for drivers is also changing.
Insurers are relying on AI more and more to make decisions and provide insurance-related services. While this new technology can be helpful in many cases, those who have been injured in an auto accident should still work with an experienced car accident lawyer to ensure their rights are protected. Here’s what you should know about artificial intelligence in the insurance industry in Nevada.
How Has AI Changed the Insurance Industry?
Until recently, providing car insurance was a labor-intensive experience. Humans evaluated applications and made judgment calls about risks. They handled each claim through personal investigations that took days, weeks or even months to complete.
Consumers couldn’t buy insurance based on their personal behavior and risks. Instead, they joined risk pools based on generalized characteristics. Today, artificial intelligence allows drivers in Nevada to have a much more customized experience buying insurance and making claims.
What Is Artificial Intelligence in the Insurance Industry?
AI is the use of technology and automated data analysis to replace human action with technology. Artificial intelligence can allow a consumer to purchase insurance without interacting with a person. It can allow the insurance company to provide a highly tailored insurance policy with both coverage and a premium that’s carefully measured to the individual’s risk. Here are some of the many ways that artificial intelligence is transforming Nevada’s insurance industry:
Behavioral policy pricing: In the past, a person who applied for an insurance policy was evaluated based on their general characteristics. The insurance company might look at their age and their driving history. Then, the insurance company would make generalizations as part of a large applicant pool.
Today, the insurance company can look at a person’s specific behavior. If a driver is on the road much less than a typical driver, an insurance company can offer them a premium reduction. If a driver has a sensor installed in their vehicle, the insurance company can reward a driver for driving at or below the speed limit. Drivers in Nevada no longer need to be evaluated based on the characteristics of the group. Instead, the insurance company can look at the driver’s individual behavior to determine the amount of risk involved in insuring the driver given the totality of the circumstances.
Personalization of coverage based on needs: Today, drivers use their vehicles in more diverse ways than ever before. They might use their vehicle to drive for work. They might work for themselves as a rideshare driver for a company like Uber or Lyft. A driver might use their vehicle very little and only for personal use. AI allows insurance providers to cater to each consumer’s needs based on their driving behaviors.
Accuracy in the insurance sales process: Artificial insurance systems can make the insurance sales process more accurate. Previously, insurance companies relied on honest statements from applicants about their personal characteristics and driving histories. Now, artificial intelligence allows insurers to gather more information than ever before and analyze it quickly to make sure that they’re providing insurance based on accurate information about their customers.
Faster claim settlements: Companies can resolve insurance claims much faster using AI. Consumers don’t have to find the claims phone number and wait to make a report. Instead, they can begin a claim right at the scene of the accident using an app or a website.
Also, the insurance company can process the claim more quickly. Using artificial intelligence, an insurance company can evaluate medical records in a matter of seconds where an evaluation by human eyes might take several hours. Artificial intelligence can apply algorithms and text recognition systems to evaluate claims much more quickly than ever before. In addition, artificial intelligence can assess the claim against the client’s insurance coverage to make a decision about liability and ultimately make a decision about whether to pay a claim.
Decreasing fraud: Artificial intelligence can reduce fraud. It can gather statistics about when and how fraud is likely to occur. Then, algorithms can flag cases for potential fraud. Using artificial intelligence to root out fraud can ultimately lower costs to consumers in the form of lower premiums.
Consumers Prefer to Click, but They Remain Skeptical of AI
Perhaps one of the challenges of artificial intelligence in the insurance industry is selling consumers on the merits of its use. Consumers love to go online instead of picking up the phone. However, they also know the frustration of encountering automated systems when they want to speak to a live person.
Insurance companies going boldly into the world of artificial intelligence must educate consumers on how artificial intelligence can provide them with an improved insurance experience from the application process all the way through making claims.
Artificial Intelligence Developers Within the Insurance Industry Would Be Wise to Study Nevada’s Negligence Laws
As insurance companies move to automated systems to evaluate and pay insurance claims, they must keep in mind that Nevada’s laws regarding negligence and comparative negligence still apply. Insurers cannot rely on automated claims processing systems to defend against failure to pay claims. Developers within the insurance company would be wise to study Nevada’s negligence laws as they create artificial intelligence.
Only a full understanding of legal liabilities under the law can allow developers to make systems which accurately pay valid claims while rooting out fraud and claims that are not covered by the insurance policy. Insurers should also be mindful of the fact that laws are different between states. Insurance companies that insure drivers in multiple states must study each state’s law to develop an effective artificial intelligence system for all consumers.
What Should Industry Professionals Do to Remain up to Date?
Insurance industry professionals should explore all possibilities to use artificial intelligence in their work. As AI becomes more available, consumers may demand it when choosing among insurance providers. Companies are wise to invest in artificial intelligence technologies to remain competitive among their peers.
Attorneys who practice in the areas of personal injury and insurance litigation should keep artificial intelligence in mind as they work to represent clients. Attorneys should take advantage of the data mining that artificial intelligence can accomplish when they make decisions about how to conduct discovery. They should also instruct their clients to keep records rather than depending on the insurance company’s AI systems to keep complete and accurate records on their client’s behalf.
Attorneys in the field should also remember that avenues exist in the Nevada legal system to give clients a redress if the insurance company’s artificial intelligence system denies a valid claim or fails to otherwise respond appropriately for their client.