Motor insurance is about the assessment of the risk of your having an accident and making a claim on your insurance policy. Telematics car insurance is the next step in getting a premium based on your own individual driving style.
Traditionally, insurers have tried to assess that risk by considering your own past driving history and setting that against the average number of claims made by a driver of a similar age, driving a similar vehicle, in a similar occupation and living in the same area of the country.
This is all very well, but it hardly gives a picture of how you, rather than the average driver, are driving now – yet this represents a much fairer and more accurate indication of the level at which your insurance premiums need to be pitched.
Telematics is on the verge of changing all that, with telematics car insurance – an innovation we champion here at GSI Insurance – finally giving you the opportunity of demonstrating to an insurer just how:
- safely you are driving;
- how the risk of accidents and claims is thereby reduced; and
- the lower the premiums you may need to pay as a result.
How is that done?
This is achieved by installing into your car a telematics device – popularly known as a “black box” – which records in real time such important information as:
- your location – using the now familiar technology of geographical positioning systems (GPS);
- the length of time you have been driving;
- how steadily or quickly you are accelerating;
- how smooth or erratic is your braking; and
- the way you are performing important manoeuvres such as cornering.
All of this information may be fed back to your insurer as it happens, giving an immediate picture and permanent record of how you have been driving – hopefully proving, of course, that it has been entirely safe, likely to reduce the possibility of an accident, and therefore qualifying you for more favourably priced insurance premiums.
Any driver may benefit from having this immediate and accurate relationship with an insurer – it is likely to be much fairer and a lot more accurate in assessing the risk of an accident than anything that might have happened to you before or whatever the average motorist might be doing.
There are two areas, however, where telematics is already changing the face of the relationship between insurers and drivers.
On average, younger drivers under the age of 25 tend to be involved in more accidents than their older, more experienced fellow motorists. As a result, the premiums they pay on those first few years of insurance have been normally notoriously high.
In an article dated the 3rd of March 2016, however, the online magazine The Actuary reported that motor insurance premiums for younger drivers have actually been swimming against the tide of steady increases and fell by an average 5.5% during the year from August 2014 to August 2015.
The reason is reckoned to be the steadily growing take-up by drivers and insurers of black box telematics, which keep insurers appraised about the safety and performance of youngster’s driving habits – and whether or not they are keeping to hours of curfew to which they may have agreed. Safer driving habits, compliance with any curfew, and the absence of insurance claims may then lead to a reduction in the cost of premiums.
Another area where telematics is coming into its own is as an aid to managers of delivery vans or commercial fleets.
As suppliers Black Telematics Box suggest, telematics not only help to keep track of such delivery vehicles and pin down their location at any one time, but also provide feedback on driver and vehicle efficiency and a ready means of tracing any vehicle which happens to be stolen.
Telematics car insurance is expecting to evolve over time