Telematics is coming to your car insurance policy- and it'll tell your mum
Telematics- the black box that can be fitted to cars- are already A Thing, but for most people, the decision of whether or not to subject your driving to such scrutiny is a voluntary one. However, increasingly drivers under 25 are being ‘encouraged’ to install a system or face the consequences of higher insurance premiums. But some insurers are even installing systems that will grass you up to your mum if you exceed the speed limit.
The new technology not only tracks youngsters’ every move behind the wheel, but texts their parents if it thinks they have broken the speed limit, or are braking too quickly, for example. Insurers claim this is all kosher because parents, who often cough up to fund their child’s car, have more influence over their child’s driving habits than the insurer.
“We contact parents, as well as phone call, text and update a driver’s online account if they don’t drive safely,” Crispin Moger of specialist insurer Marmalade told the Telegraph, adding “We involve parents as we don’t want young drivers to ignore messages we send them, although we can withdraw the policy if they keep driving badly.”
Other insurers will only tell parents if they have bought the policy. Steve Kerrigan of The Co-operative Insurance, who have shopped 1,500drivers for speeding since installing telematics four years ago think the system offers “reassurance to parents who can 'see’ their children when they are out on the road and otherwise on their own.”
Some firms work by reducing premiums for drivers who agree to have telematics installed, others offer discounts for good driving behaviour, like More Than, who offer a discount of up to 2.5% after every three month review or the Co-Op who assess driving every 90 days and when the premium will either go up by 20%, or be discounted by 30%. Marmalade just slap you with a £250 penalty for bad driving as “if it was just a £10 increase then people would ignore it.”
But of course these telematics are entirely optional. You can choose to pay up to £1000 extra for a non-monitored policy. The average increase for More Than customers is around £750, and premiums are 25% higher with Direct Line than if you concede to having a black box.
But is telematics going to be forced on to the rest of us? On a purely market-led basis, the answer would be no as the eye-watering prices levied on young drivers- who are twice as likely to have an accident than the over 60s- are what makes the cost of installing a system worthwhile for the insurer.
There are cheaper options though- some insurers offer an app that can track your driving an earn you a discount, although these systems aren’t without their issues.“The difficulty with an app-based product is the potential for fraud – you could switch your phone off or give it to your gran,” said Graeme Trudgill of the British Insurance Brokers’ Association, with uncharacteristic common sense.
But chances are that we will all be driving cars with telematics in the future as from 2017, all new cars will have black boxes installed, as part of new EU targets. The “eCall” project says that, in two years, all new cars made or sold in the EU should have a telematics device that can transmit data to insurers and call the emergency services in the event of a crash.
So is this a good thing? Surely once Big Brother is watching all of us, premiums will be weighted towards those more likely to cause an accident and safer drivers will benefit from cheaper premiums. In theory anyway…