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Car insurance needs ‘complete reform’
The car insurance industry needs “complete reform” that should focus on insuring the driver rather than the car.
Technology should be used to base car insurance policies around ‘pay as you drive’ schemes rather than around individual cars and drivers.
Telematics provider Cobra says the gadgetry is already in place and would result in cheaper insurance bills for sensible drivers.
Such systems also have the potential to reduce the casualty rates of younger drivers by encouraging them to drive more sensibly.
“Pay how you drive insurance is a way of tempering a young driver’s behaviour at the wheel that doesn’t restrict their mobility,” said Cobra UK MD Andrew Smith.
Because young drivers would know they were being monitored, and paying for insurance based on how sensibly they were driving, the theory is they would alter their style to save cash.
This could lead to a fall in young driver insurance premiums, which can cost several thousand pounds a year.
“Year after year the same problems are being discussed,” said Smith. “Telematics technology is already in place which can reduce accidents… at the same time as improving standards of driving.
“Pay how you drive insurance will automatically deliver lower premiums for those drivers who drive sensibly and pay as you drive means drivers only pay for the journeys they undertake.
“It will also incentivise drivers to use their car away from the morning, late afternoon and holiday driving peaks, which will not only reduce premiums but reduce congestion at peak times.”
The firm proposes three new types of car insurance:
Pay How You Drive: lower premiums for better driving
Pay As You Drive: based on time, distance and location of journeys
Pay Per Use: based on mileage
Telematics-based car insurance would require cars to carry a ‘black box’. This would monitor times and distances, fuel consumption, mileage, average speed, top speed, car location, journey type, cornering dynamics and the number of hard accelerations and decelerations – using all these feeds to calculate a premium.
Do you like the idea of driver-based car insurance, and would you be willing to carry a black box monitor in order to save cash?
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