Telematics motor insurance could save careful motorists a small fortune – particularly those who fall into a high-risk group such as newly qualified/young. But why? Traditionally, premiums have been based on factors such as age, experience, job title, address, etc. But these only tell part of the story. Imagine, for example, twin brothers that live in the same house. Both passed their tests on the same day – they have identical cars – and they both flip burgers in the same fast-food restaurant. However, the older twin is careful behind the wheel whereas his sibling is far too aggressive. The younger brother is therefore more likely to crash but their premiums have been identical as (on paper) they pose the same risk. That would not be the case if they switched to telematics motor insurance. This cover – which is also known as pay-how-you-drive and black box insurance – would ensure their premiums are based on their driving styles via black boxes within their cars. These devices – which are about the size of a deck of cards – could be concealed (say) under their bonnets. They would then record factors such as acceleration ferocity and corning/brake force that alongside the traditional elements would set their premiums. The sensible brother would therefore pay less than his sibling.
Benefits of Telematics Motor Insurance
Telematics motor insurance is available via various companies so the benefits vary considerably. Best read the small print, then. Some policies, for example, enable insurers to reduce the monthly premiums at specified points. Others offer non-monetary incentives such as free mileage allowance increases. There are other benefits too. For example, the black boxes contain GPS systems so stolen vehicles can be traced – and warning stickers to this effect minimise the risk of theft. Some boxes even help the emergency services locate vehicles after accidents which could save lives. Motorists can also receive feedback on their driving that could make them safer behind the wheel. This, in turn, could reduce their premiums further. But there are disadvantages too. Policy holders must be careful who they select as named drivers as the black boxes cannot identify who is driving. As such, responsible main drivers might be looking forward to being rewarded by their insurers but these would not be forthcoming if the named drivers have been less conscientious. Plus, of course, there are no guarantees that telematics motor cover will be cheaper long term than more traditional alternatives.