The Benefits of Telematics Insurance – When someone shops around for car insurance, underwriters will typically set their premium based on various assumptions; such as age, gender or occupation. For example, a newly qualified motorist may receive an expensive car insurance quote to reflect his or her inexperience.
However, we live in a world which is constantly being influenced by technology. A decade ago, the idea of smartphones, motion sensitive game consoles and 3D cinemas may have seemed far-fetched – but these are now common parts of our everyday lives.
So, why are some insurance companies still setting premiums based on assumptions and theories? Can technology be used to aid insurers and customers?
Fortunately, telematics technology is helping to bring car insurance into the 21st century.
Telematics insurance involves fitting a ‘tracking device’ (also known variously as a Clear Box, smartbox or black box) to a policy holder’s vehicle. On activation, the device sends data regarding the motorist’s driving habits to their insurer.
Providing a telematics customer drives safely, he or she may see a reduction in their car insurance premium when they renew their policy. However, cheaper prices are not the only benefit of telematics as there are also a wide variety of other advantages as well.
The benefits of Telematics
When a clear box collects data regarding a policy holder’s driving habits, they can usually view this information via the internet.
However some companies, feel providing access to this information is not enough and will also offer advice to help drivers become safer motorists.
According to research, conducted by a UK car insurer, a driver who has a telematics box fitted to their vehicle is 20% less likely to be involved in a traffic accident than someone who does not.
Distance and time
The price of a telematics policy will also differ depending on when, and how often, a motorist drives. Vehicle accidents are more likely to occur at certain times of day.
For example, if a motorist avoids driving during the evening rush hour, or between 10pm and 4am, they may see a reduction in their premium when they renew their policy if their overall driving has been safe.
Furthermore, if a motorist only uses their car very rarely, or for short distances, he or she will probably benefit from a telematics policy.
Help in the event of theft
No-one wants to be the victim of vehicle theft. However, telematics technology can help a driver reclaim their stolen vehicle. A telematics box monitors the owner’s driving habits – but it also records a car’s location.
Therefore, in the event of theft, an insurer should be able to liaise with police and start monitoring a stolen vehicle. Hopefully, telematics will allow the owner to quickly reclaim their property.
Providing peace of mind to parents
After passing their driving test, many newly qualified motorists may want to get on the roads and experience their new-found freedom. Although driving is often a joy, parents may feel anxious about their children potentially experiencing the hazards of motoring.
While telematics technology provides driving-related information to policy holders, some insurers also allow parents to view this data.
If their child drives safely and responsibly, parents can rest easier knowing their son or daughter is in the process of perfecting their driving skills. For added peace of mind, telematics technology can also detect when a vehicle has suffered a traffic accident and this will trigger breakdown recovery or emergency assistance if needed.
Claiming for an accident
If a motorist crashes their vehicle, telematics will detect information regarding the collision. Such as the:
- Time and place of the accident;Force of impact on the vehicle;Vehicle’s direction at the time of collision; and Speed of the vehicle before and after the time of impact.
- If a driver is involved in a traffic accident and wishes to show it was not their fault, he or she may be able to use telematics data to prove it.
- Not so good for boy (or girl) racers.
While telematics may appeal to many drivers, those who regularly drive at high speeds, use their car for long periods or drive often in rush hour and late at night may have little to gain from a black box policy.
However, if you are looking to prove your skill behind the wheel and a safe and responsible driver, you should consider looking at vehicle cover with a telematics insurer.