In recent years telematics for car insurance has come on leaps and bounds - and has rapidly grown in popularity.
Telematics Car Insurance on the Upswing
Telematics car insurance is on the upswing - but just what is it and how does it work?
What Is Telematics Car Insurance?
The concept of telematics car insurance is still not one easily grasped by many.
So what is it? In simple terms it's a tracking policy - a policy that utilises data gathered by a tracking device that is installed in the vehicle... sound scary? It shouldn't.
Let's take this back a notch – the concept originally came about due to the ever increasing expense of traditional car insurance for young drivers. A number of insurers and brokers have recognised this fact so as a result the use of in-car technology to monitor driving was born to help reduce premiums.
The telematics device that's installed in the young driver's car basically gathers information about how the motorist drives. Data gathered includes speeding information, braking patterns, and harshness of acceleration, cornering, and a number of other elements. By using this information telematics car insurance providers can adjust policies accordingly.
For example, if a young driver drives well then they may be rewarded with a discounted policy at renewal or, in some cases, such as "pay-as-you-drive" policies, the motorist may "earn" mileage points. These mileage points are simply added to the pot of mileage the driver has left on their policy.
But not every policy suits everyone - which is why there are so many different types available in the market place.
Types of Policies
Let's take a look at a few examples of different types of policies:
A usage based policy such as iKube, for example, restricts on the time the motorist drives and asks the young driver not to drive between 11pm - 5am at night (hardly a time many of us would want to), however, it doesn't restrict mileage driven.
The iKube scheme can also reward young and learner drivers with discounts (by up to 40%) when it comes around to renewing their policy. It’s certainly worth considering if you’re a learner or a newly qualified driver with no driving experience.
I recommend visiting the website to find out more about their young and learner driver insurance scheme.
Fair Pay is another example that doesn't restrict the time of day the young driver drives but it will set a number of mileage units - that can then be added to should the driver need extra points. Alternatively, if they drive well - they may be rewarded with additional mileage units as a result.
The other key difference with this policy is the use of the TomTom navigation device that sits in the car alerting the driver as to any events or issues whilst they’re driving (as well as acting as a traditional sat nav). By having this device in the car the motorist is able to adapt their driving style accordingly… potentially improving their driving and benefitting from lower premiums.
Fair Pay is suitable for young drivers who have been driving for a year with no claims. It could also be useful for female drivers who are expecting to see their car insurance increase with the recent EU ruling.
Visit Fair Pay to find out more about their young drivers insurance scheme.
Whilst telematics might not appeal to everyone you should bear-in-mind that a number of British politicians and the Association of British Insurers are backing telematics and it could is predicted to be used in a significant number of vehicles in the next few years.
With the rising cost of traditional car insurance, fuel duty, high VAT and car maintenance costs the question needs to be asked… is telematics the future?