For those of you unaware, telematics is basically the merging of telecommunications and informatics – the transmission of information after it’s been acquired and processed.
So what relevance does this have to the motor trade insuranceworld?
Well we’ve all heard of ‘pay-as-you-go’ mobile phones; for people that don’t use their phone too often, and don’t want to pay a large monthly bill. So how does ‘pay-as-you-drive’ insurance sound? A policy where the less you drive, the less you end up paying could soon be a reality.
The cost of implementing the technology could be the one stumbling block that prevents insurance underwriters having all the information they could ever dream of relating to a driver’s habits whilst behind the wheel. However leading motor manufacturer BMW are considering introducing telematics technology into all of its new vehicles as early as 2015. Telematics companies would download the data and forward it to in the insurers for underwriting and claims purposes.
In the event of a claim the underwriters would be able to get crucial information on a vehicle’s speed, throttle and steering angle, and braking application, this could ultimately cut down on disputes in liability. A similar process to the way authorities use the information stored in an aircraft’s ‘Black Box’ when investigating a plane crash.
There is another proposal – that insurers could get information on the way in which a policy holder is driving his or her vehicle, and base their premium on the aggressiveness of the policy holder’s driving, judging whether they are likely to have a claim or not.
Some people may feel as though this puts somewhat of a watchful ‘Big Brother’ eye on ones driving. However I’m sure for many people the increased safety on our roads and the potential drop in motor insurance premiums will be a trade worth making. And for those only covering a short distance per year, the introduction of a pay-as-you-drive policy would be a refreshing change. Likewise for large commercial vehicle insurance and fleet insurance policies the potential savings could be huge.
