Telematics car insurance
Telematics car insurance uses specialist new technology that rewards safe drivers by cutting the cost of their car insurance.
Telematics or 'pay-how-you-drive' car insurance products can see drivers enjoying reduced premiums if they fulfil certain criteria, such as accelerating, braking and rounding corners at a responsible speed.
How it works
Designed to encourage motorists to drive safely, anticipate road conditions, and therefore lower their risk of having an accident, telematics car insurance involves the installation of a compact, smartphone-sized 'black box' device underneath the vehicle's dashboard. This combines technologies such as a global positioning system (GPS) unit, a wireless communications unit, and an accelerometer to monitor driver speed and behaviour, the types of roads that are being driven on, and the times of day the vehicle is being used. Insurance companies receive this data and can adjust the premium accordingly, rewarding lower-risk drivers with lower premiums.
Widely regarded by many experts as the future of motor insurance, especially for young drivers, an increasing number of insurers are now offering telematics or black box devices to their customers.
Monitoring your driving
Many telematics-based insurance products enable drivers to log in online and monitor their own driving performance, while the same data is also relayed via satellite to the insurance company so that they can adjust the premium accordingly.
Some devices even alert you about dangerous driving in real-time, giving you the information you need to improve your driving, and at the same time keep you up-to-date with your remaining mileage allowance so that you can make sure you stay within your annual limit.
Benefits of telematics for young drivers and other 'high risk' categories
Young drivers (particularly young male drivers) who have traditionally been hit by high car insurance premiums could benefit the most from telematics-based insurance if they drive responsibly – simply because they will be given the chance to prove themselves individually, rather than being lumped in a 'high risk' category purely on the basis of statistics.
It's no surprise that young people's car insurance is traditionally amongst the most expensive when Government statistics reveal that an 18-year-old driver is more than three times more likely to be involved in a crash than a 48 year old driver; one in five drivers crash within their first year of driving; and almost one in four passengers who has been seriously injured was travelling with a young driver at the time.
By having a telematics device installed in their vehicle, young drivers – and any other motorists who would traditionally fall into “'high risk' categories – could see their premiums cut if they drive carefully.