Auto insurance has long been a source of frustration for drivers, but even more so now. Insurers are feeling the pressure from rising rates and increasingly agitated policyholders who feel like they’re losing control of their vehicle ownership experience.
In our 2025 State of Connected Car Apps report, a staggering 53% of drivers report poor communication from their providers about premiums and deductibles.
But what if there were a way to rebuild trust and transparency in auto insurance?
Our report dives deeper into the idea of data-driven insurance and what that actually means for drivers. We aim to help insurers understand the pain points that are top of mind for our respondents and highlight the fact that drivers do want a more tech-enabled insurance experience.
You might be surprised to see the receptiveness of drivers toward data-driven insurance — at first.
But as we’ll explore in this article, the driving factors of this receptiveness have been in motion for a while. Ultimately, we'll demonstrate how a driver-centered approach, fueled by data, is the key to a future of vehicle protection built on trust and understanding.
High premiums. Low clarity.
According to the drivers we surveyed, there’s a clear transparency gap in the communication they receive from insurers.
In both the US and Europe, the biggest pain point for drivers wasn’t directly the cost of premiums. More so, it was a lack of understanding of why they had to pay insurers so much.
I’m sure you wouldn’t welcome a 14% raise in your car insurance bill with open arms without any explanation.
And guess what — that’s not a hypothetical scenario either. It’s been a reality for many drivers across America. In major European markets like the UK and Germany, average rates for auto insurance have also seen respective increases of 34% and 20%.
The added financial burden of these price hikes can cause other trickle-down effects, too, like higher rates of intentionally underreported mileage from policyholders.
Drivers are frustrated, but mostly confused. They can't make better decisions if they only receive reactive communication and a lack of visibility into how driving habits impact risk assessment. When rates increase during renewals, policyholders feel blindsided and increasingly doubtful of their insurer.
Better communication helps insurers navigate a riskier landscape.
With ongoing overall global instability and risk escalations, price increases are impossible to avoid. CNBC reports that the 25% tariffs on car parts from Canada and Mexico will impact insurance rates, with data by Insurify estimating an 8% increase by the end of 2025.
This may seem like a small uptick compared to the 5% year-over-year increase that Insurify has projected without tariffs. But this three-point increase means that rises in car insurance rates are happening 60% faster with tariffs.
We can’t control the impact of external factors on insurance prices, but we can strengthen the operational processes that support policyholders and encourage action.
Our report discovers that there’s already a breakdown of trust between policyholders and insurers:
Out of the 43% of drivers we surveyed who wanted to use car data to improve their auto insurance experience, 1 in 5 drivers struggled with their auto insurer because:
- They don’t get proactive reminders about renewal deadlines.
- They have poor visibility into how their driving affects insurance rates.
- They face challenges finding repair shops that are within their insurer’s coverage network.
Almost 20% of these drivers also call out how the recommendations they receive from their auto insurers are often inaccurate or irrelevant.
Drivers actually see vehicle data as a way to rebuild trust.
There’s been a lot of discussion around the impact of vehicle telematics on auto insurance innovation. Major media outlets covered how mobile applications downloaded by policyholders were collecting driving data and selling them to insurance companies without driver consent. This data was impacting insurance rates, causing price increases that surprised many vehicle owners.
The major issue here was a lack of communication on when, why, and how driving data was being collected. Would drivers be more open to sharing their vehicle data if they could choose what it was used for?
Well, yes!
Our findings show that drivers know exactly what they want to use their car data for. And all of these features point toward improvements to the auto insurance experience that can reestablish trust already broken before the emergence of these data-sharing horror stories.
According to the drivers we surveyed, this is what vehicle connectivity should enable 👇
More drivers are open to sharing car data than you think.
The results of our survey actually counter the outdated narrative that all drivers are scared of sharing their data with auto insurers.
41% of drivers said they were likely to share their vehicle data.
If drivers were given the opportunity to reduce their insurance prices with personalized plans, these drivers saw the benefit of using vehicle data to make that happen. This positive sentiment reflects a growing acceptance of using vehicle data for insurance personalization, such as mileage-based insurance models.
Only 22% said they were completely unlikely.
It’s not surprising that some drivers have hesitations. We were actually expecting this number to be a little higher. But as we can see, outright opposition to data-driven insurance is limited.
The remaining 37% of respondents said they had no strong feelings about data-sharing in auto insurance. This neutrality doesn’t suggest outright rejection but rather a gap in awareness and familiarity. Many drivers may not yet recognize how vehicle connectivity and personalized insurance can directly benefit them.
The future of protection is driver-centered — and data makes that happen.
If there’s one thing to take away from our findings, it’s that innovation in auto insurance isn’t broken. On the contrary, traditional methods of communication with policyholders are.
As insurers navigate turbulence ahead, the importance of giving policyholders clarity, speed, and a sense of control will become even greater.
Smartcar empowers insurers to earn trust, not by aggregating data, but by making it visible, understandable, and valuable to vehicle owners. Smartcar helps auto insurers collect driver consent and turn data into a powerful tool for customer engagement and personalized services by providing secure, real-time access to vehicle odometers.
- Accurate odometer verification: Eliminates reliance on self-reporting and costly hardware to get vehicle mileage.
- Fraud prevention: Ensure tamper-proof mileage verification to improve the accuracy of risk assessments.
- Privacy-first, scalable solution: Use a software-based vehicle integration that collects only odometer data with driver consent, ensuring regulatory compliance and driver confidence.
Schedule a meeting with our team to learn more about how Smartcar can help your auto insurance business prevent misreported mileage and improve customer engagement.
