Thursday, September 20, 2012

Telematics : the future of car insurance?

Telematics in its most general sense is the combination of technology and moving vehicles. However this is most generally used when referring to the tracking of motors via GPS technology and therefore it's application in vehicle insurance.

There are several ways this technology can be used and insurance companies are still looking at different ways to best offer a product to the motor market. Some providers offering a ‘pay-as-you-drive’ model similar to the way you get ‘pay-as-you-go’ tariffs for mobile phones. But others can set up restrictions for drivers, with time and geography both being possible means of restricting customers.

This in theory means they can keep premiums low by agreeing with customers that they will avoid high risk / cost activity (e.g. Away from accident black spots) or only do a specific amount of annual mileage.
Taking this only a tiny step further, this therefore can be a system for rewarding the insured for positive driving.

That little box of electronics in the boot will know everywhere you go, the speed you do it and the time you got there... then it will always report this activity back. Making it a cross between the black box flight recorder, your little brother and a trucker's tachograph.

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