No one wants their comings and goings monitored by agencies who collect data on our behaviour to do with as they will. However, sometimes this kind of data gathering can be to our advantage. Take, for example, telematics being used by car insurers. The idea has been around for a couple of years now, and early adopters are giving the system positive feedback.
Telemetrics, when used in car insurance, is a method of recording who drives a car, when, where and how fast so the amount of insurance you are liable for can be assessed on real data rather than shoe-horning you into a band based on your age, sex, location and occupation.
Originally conceived as a way of making insuring younger drivers more affordable, it’s also becoming popular with people thought to be less of a risk, those aged between 25 and 55. Being that they are already considered a safer demographic, taking advantage of a system that reflects actual use can also make driving for these reliable members of the driving community even more rewarding.
In three months preceding February this year, 14% of policies sold were based on telemetric applications and three quarters of the policies sold went to people aged 25-54. Provided the drivers are safe, telemetric insurance can help anybody’s insurance remain low. The AA’s index of insurance premiums showed that there was a 15% increase in insurance fees from last year and, now that insurers won’t be able to ‘discriminate’ on sex from December this year, the costs for women are going to go up too.
Because there is no gender bias in telemetric insurance, these policies will become even more popular in the future. Simon Douglas of the AA’s insurance division said: “It puts ownership of responsible and safe driving firmly in the hands of the driver, regardless of their sex. It is genuinely a gender-neutral product.”
As GPS gets ever more sophisticated and accurate, the value of the data they provide is going to become even clearer to the consumer. Previously, telemetrics was quite a niche in the insurance market, with a GPS device is fitted to the car to provide your insurer with data on when and how you drive. However, the AA and Co-Op Insurance are both launching products that depend on real data to price your premiums, not history and a collection of ticked boxes.
The policies are quite a departure from traditional policies, so anyone looking to insure with a telemetric policy should be advised to look into the ins and outs very carefully. Some policies charge for an initial bundle of miles which you can top up or earn reward miles for careful driving while others provide credits that you use up as you drive. Driving at night means that you’ll use up more points than the day time, and if you use up too many you’ll have to buy more to ensure that you’re insured.
Other drivers might find that telemetric insurance isn’t for them. Older, regular drivers with sensible cars who’ve earned several years of no claims are likely to find that the rewards they receive from their traditional insurance policies beats the advantages of a ‘pay as you go’ style of insurance. Meanwhile, a driver in similar circumstances who only drives occasionally may well find that they are better off taking advantage of it.