The Association of British Insurers (ABI) has sensibly issued some guidance notes to help motorists better understand and make the most of telematics car insurance. This type of car insurance is also referred to as “black box” and “pay how you drive” car insurance.
Currently, young drivers are faced with extremely high premiums so telematics car insurance is seen as a way of going some way towards reducing or containing premiums that people pay for their car insurance. This is because telematics car insurance monitors how the car is being driven and, therefore, the likely risk of the driver having an accident and does not just base the premium on the likes of the broad age range of the motorist.
The “black box” is a small computer that is fitted around the dashboard area and provides the driver and the insurer with information such as the speed the car is being driven at, the time of day, the distance the car is driven, the sorts of roads the car is being driven on, braking and acceleration. This data along with other information such as the age of the policyholder all reflect what the premium will be and it is reviewed periodically.
Kate Carr, who is the Head of Fraud and Specialist Lines with the ABI said: “The emergence of telematics technology presents a new challenge for insurers as they design new products that best meet the needs of their customers. The guidance released today will help insurers develop products that are consumer friendly, while also helping consumers understand whether a telematics policy is right for them.”
Two guides have been produced by the ABI in conjunction with the British Insurance Brokers Association (BIBA).
One of the guides is for policyholders and covers such things as how the way you drive your car affects car insurance, how a telematics car insurance policy works, the other benefits of such a policy such as being able to track your car if it is stolen and the secure storage of personal data.
The other guide has been completed for insurers and explains such things as how policyholders and their data should be treated.
There do seem to be an increasing number of car insurance companies offering telematics car insurance so it is perhaps something that more drivers should look into- especially the young ones.