You’ve passed your driving test and if you are lucky enough to own a car your next challenge is to find insurance. Traditionally insurance premiums were based loosely on the driver’s age, driving experience, car type, previous claims, location and annual mileage. Unfortunately young drivers are more likely to be involved in accidents than older drivers. This reflects on how insurance companies set premiums. Road Safety Scotland reports young drivers; 17-25 year-olds account for 10% of licence holders, but over 20% of the accidents. The individual’s premiums are based on how the group is perceived. Young drivers; both in age and experience, were often penalised with hefty insurance premiums.
Some insurance companies still recognise the benefit of additional training beyond the driving test. Adrian Flux insurer offer 25% discount for having completed the Driving Standards Agency Pass Plus training or Advanced driving qualification.
However the way forward seems to be ‘Black box technology’ or Telematics. This technology is moving into private cars. It is an in-car tracking equipment to monitor drivers behaviour such as; speed, driving style (cornering, swerving, braking and acceleration) and what time of day the car is driven. A small devise about the size of a mobile phone records the data which is then used to calculate insurance premiums; the better the driving, the lower the premium. The device also tracks the car and has helped police recover several stolen cars.
Another change that might affect insurance premiums is the European Court of Justice banning insurers from using gender to calculate premiums from the end of 2012, it’s predicted these devices could become much more commonplace.
A number of insurance companies offer this option. Installations are commonly free, the insurer and customer have access to travel data. A mum who put her son on her policy and the price rocketed, she saved £1,500 changing to a telematic scheme.
The Co-operative Insurance has analysed the habits of 10,000 telematics insurance customers 17 to 25 across the UK, finding that they were 20% less likely to have a crash than those with standard insurance. There results also showed telematic customers have less serious accidents, with a typical claim 30% less than ordinary customers.
Currently telematic insurance policies make up less than 10% of current market. However a recent Go Compare survey of more than 2,000 drivers found that over half expect to transfer to a telematics-based insurance in the next 5 years or sooner.
The mother of one of DRM’s learner drivers explained how she saved on insurance premiums with ‘smart box’ technology. Adding her ‘learner’ son to her existing car insurance she was quoted £1300, which would rise to £3,000 when he passed the test. However by shopping around the wise mum saved, she switched to a ‘smart box’ policy. Her insurance whilst her son is a learner is £500, once qualified it will rise to £2,000 but within a year might reduce to £600 if he demonstrated safe driving. So big savings to be had.
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