Telematics is one of the biggest things to hit the motor insurance market in years. Using satellite technology in a ‘black box’ device fitted in your car (or, increasingly, an app downloaded to your mobile), it monitors how and when you drive. The insurer uses the information to determine your risk profile and then charges accordingly – after factoring-in the usual considerations about your age, type of car, driving history and where you live. Insurers are particularly interested in your acceleration and braking habits, how you corner, and how fast you tend to drive. They’ll also take note of when you tend to be on the road – during rush hour, say, or late at night – and the types of road you drive on. Basically, they want to know if you’re the type of driver who’s likely to cause an accident, or to be involved in one on a busy highway. The main attraction for the motorist is that ‘safe’ driving attracts lower premiums. And because the policyholder can also review his or her own performance, they can spot areas where a change of driving style or habit could improve their safety rating and save them money. This will either be reflected in a lowering of premiums paid monthly (after, say, a three-month review period) or a rebate at the end of the year.
Parallel benefitsIn addition to its role in motor insurance, telematics technology can also:
- help track a stolen car
- provide real-time feedback on driving and fuel consumption
- trigger a call to the emergency services in the event of an accident
- provide evidence to help determine liability after a crash.