A common misconception about the correlation between blockchain and Bitcoin is that the two are synonyms to each other. While they are often used interchangeably, Bitcoin and other cryptocurrencies are the products of the blockchain technology; which is a public, decentralized ledger of sorts.
In layman terms, blockchain helps in creating a system, ledger or database that is not controlled by any one party. It distributes the rights amongst users, and this ensures that no changes can be made without the approval of all those that are involved. This is where cryptocurrency comes in.
Cryptocurrency, which is also known as digital currency, is not the run-of-the-mill fiat money that you’d expect to buy groceries from. Instead, these digital coins are what you use to make transactions in the blockchain world. Currently, one Bitcoin is worth more than $7000, and this rate keeps increasing as more and more people invest in this promising and innovative technology.
The blockchain technology, though still in its early stages, is quickly making its way into the world’s largest industries. People around the world are finding more ways to use the technology so that applications and databases can be made more secure, reliable, and convenient.
This is why you must have also heard of how blockchain is revolutionizing the automobile industry. Not only are companies coming up with new methods to make the valuations and car data systems more reliable but there’s also talk of how the technology is changing the way we purchase automobile insurance.
So, let’s take a closer look at how blockchain is altering vehicle insurance and how it can affect both the insurer as well as the one seeking it.
It will eliminate redundancies
The automobile insurance industry is one that requires a lot of workforces. The reason for this is simple; there’s a lot of mistrust between parties, and this is why verifications need to be made several times throughout the cycle.
This doesn’t just waste time and effort but a considerable amount of money as well. Even so, insurance companies face tons of losses in the form of false claims and frauds.
However, with the blockchain technology, the lengthiness, as well as the time of the verifications, will reduce because all the information will already be verified. Moreover, all the information about the applicant will be available, and this will reduce the chances of identity theft and insurance fraud.
Because confirmations will be available sooner, applications will get accepted or rejected much quicker, and the overall insurance process will speed up.
it will give unlimited access to information
Let’s say you want to ensure a scrap car UK. What will you do to buy a policy for the vehicle you just bought? In most cases, both you and the insurer will need to know about the entire history of the car, and this entails information about the original equipment manufacturers (OEM), the accident records, the repairs done after floods or accidents, and whether or not the car was maintained properly.
Instead of relying on automotive reports that are limited in their collection of facts and data, you will have a valuations system that will tell you everything about the car from when it was first manufactured to its last owner. It means you will also buy insurance that is actually worthy of the vehicle you’re driving.
It will improve premiums
One of the biggest problems that people face while searching for automobile insurance is its high rates. Depending on your age, gender, and location, your insurance can cost anywhere between a couple of hundred dollars to thousands per annum.
This is unfortunate because while demographics do tell a lot about the general population, they don’t reflect the individual’s driving habits. Thankfully, with blockchain technology and telematics driving, insurance companies can now track mileage and driving habits.
Insurance plans with this particular technology have already been rolled out in Singapore and users are taking advantage of lower premiums. This means that you won’t just be able to get affordable insurance but can also expect a decline in road accidents as drivers strive to lower their costs by improving their performance on the road.
It will make data more secure
Safety and security from threats is another advantage you’ll gain from it as insurance companies start to embrace the blockchain technology..
No matter how many locks you put to keep information save, these can be broken by people who have the skill to do so.
However, with a decentralized database backed up by the blockchain technology, your data will stay away from prying hands because it won’t be available at a central location.
This means that it won’t be vulnerable to an exposure to a third party and you’ll be safe not only from identity theft but other serious threats as well.
It will bring cryptocurrency into the mix
Shortly, you may not have to pay cash from your account to buy an insurance plan. Instead, you can directly access your online wallet and transfer funds in the form of any of the accepted cryptocurrencies.
Using digital coins to purchase insurance will further speed up the insurance process because there will be no lengthy bank processes or charges.
Moreover, because cryptocurrency is a part of the blockchain technology, you can ensure that your coins will stay safe if stored in the right place.
Make sure that you invest in some of the highest bidding cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Ripple because these will not only give you the highest value but will also have a chance of being accepted at most places.
While it will take some time to mature completely, the blockchain technology is already making waves in the automobile industry and changing how cars are manufactured and run. Before long, it will be an integral part of the insurance industry all over the world, and this will mean that consumers like you can benefit in several ways.