The recent summit convened by Prime Minister David Cameron has created many ripples in the UK car insurance industry. With issues like whiplash claims, compensation culture and high premium rates for young drivers plaguing the nation, new measures have been called for to bring down the £2 billion tag that such problems have cost the insurance industry.
Talking about young drivers, Mr. Cameron has resolved that installation of black box technologies and telematics systems will help make the roads safer as well as reducing the premium charges levied on the drivers. Black box technology is a means of measuring driver performance. The recorded information of driving behaviour is then sent to the insurance company, which evaluates it and assigns a suitable premium based on how safe a driver is.
Black box technology has already started ruling the roost in Europe, owing to a recent court ruling that bans insurance companies from using gender as a basis while calculating insurance premiums. Since women are more liable to drive safely, they have traditionally enjoyed cheap car insurance rates as compared to their male counterparts. This is why most women drivers welcome the black box technology after the disappointing decision meted out by the court.
According to Simon Douglas, executive director of a respectable car insurance company, “Telematic insurance is genuinely gender-neutral – it rewards safe driving behaviour regardless of whether you’re male or female. It places firmly in the hands of the driver safe and responsible driving, which is rewarded by reduced premiums.”
The Co-operative has stated that over 12,000 17-25 year old drivers have already decided to install telematics systems in their vehicles and are enjoying cheap car insurance premiums as a result. Almost 90 per cent of young drivers who signed up for black box products are already starting to receive lower premium rates. Overall, the amount of money saved on premiums comes to a whopping £20 million by the next three years.
According to David Neave, “The cost of insurance has hit an all-time high, especially for young drivers who feel that they are being priced off the road. Currently, many young motorists who drive safely are picking up the tab for the ones that drive recklessly. However, the black box allows people to pay a fair and personalised price for their cover, determined by how well they drive.”
David Cameron has taken several measures to reduce insurance costs by dealing with problems related to legal costs, compensation culture and cutting safety red tapes and health issues.
“I am determined to tackle this damaging compensation culture which has been pushing up premiums,” Mr. Cameron was quoted as saying, “I want to stop trivial claims, free up businesses from the stranglehold of health and safety red tape and look at ways we can bring the costs down.”