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Motor insurance policies look set to get a little cheaper, at least for people who are happy for their insurer to keep an eye on they’re driving.
Both the AA and Motaquote are offering discounted premiums for drivers prepared to fit a tracking device in their vehicles that monitors their driving habits — the idea being that if the recorded data backs up the policy holder’s claim of being a ‘safe driver’, they won’t be asked to foot the bill for claims made by people who aren’t.
The AA’s system — due to be formally announced later this week — uses a small box fitted to the car that records speed, braking severity, cornering and the types of roads used (presumably using GPS tracking) on each journey. This information is then transmitted to the insurer.
According to a report by BBC News, policyholders online can also access the data, where information on overall performance is provided, along with warnings about premium increases based on their driving.
AA spokesperson Ian Crowder told the BBC: “The point is that these sorts of devices firmly put in the hands of the driver a responsibility for driving safely. All the anecdotal evidence suggests that people who have installed the system have about a 30% better claims experience — in other words, less crashes — than those who don’t.”
Motoquote’s similar system has been launched in partnership with TomTom. It uses a specially developed TomTom PRO 3100 satellite navigation device, which includes Active Driver Feedback and LIVE Services.
Once installed, policyholders can be alerted to driving events, such as harsh cornering and sharp breaking, and benefit from accurate traffic information updated every two minutes
Drivers will also have a ‘LINK’ tracking unit fitted in their vehicles, allowing driver behaviour and habits to be monitored.
As with the AA system, this information can then be viewed by the policyholder in an online driver dashboard that details journey and driver behaviour data, and provides regular email bulletins.
Nigel Lombard, Managing Director of underwriters Fair Pay Insurance, said: “This is unlike some other telematics-based schemes where you may have to prove your ability over a number of months.”
“So if you think of your insurance as your car's MPG — the better you drive, the longer your fuel will last,” he added. “It's the same with Fair Pay Insurance, good drivers get more for their money and in that sense they will pay ultimately less.”
Such schemes are most likely to be of benefit to young drivers, who are currently forced to pay enormous premiums even for small cars, based on their statistical likelihood of making a claim.
With other insurers reportedly testing similar systems though, there could well be a shift from premiums based on driver safety rather than such things as age, gender and type of car.
There are obvious concerns about what other data, besides basic telemetry, that such monitoring systems might record — and whether or not safe drivers who choose not to use them will be unfairly penalised.