If you are a young driver, or indeed a parent of a young driver, you will know that the costs of insuring your vehicle are border line crazy at the moment. Young drivers are being forced to pay extortionate amounts to insure a car worth a fraction of the premium. The average quote is £2,251 with some young drivers receiving quotes of over £8,000 for cars worth £900; recent trends have seen insurers increase 17-25 year old drivers premiums by up to 58% which is 20% higher than other motorists.
During a press meeting at the Goodwood Racing Circuit respected Journalist Quentin Wilson recounted the number of letters he receives each week from worried parents. He explained that young drivers are being ‘priced out of the market’ which can have a knock on affect to their lives. If they can’t afford insurance it could result in them losing/not getting a job placement or may even encourage non insured driving.
The event was arranged by the Co-Operative insurance group to showcase some new technology aimed at young drivers up to the age of 25. The new ‘pay how you drive’ insurance policy uses a clever smart sensor to monitor four areas of driving with the aim of both promoting and rewarding safe drivers who are fed up with being penalised due to other unsafe ‘boy/girl racers’.
The Smart sensor (they were very clear we shouldn’t stigmatize it as a ‘black box’) is fitted free of charge within 24 days of the policies start date. It measures various data from the way the vehicle is driven and comes equipped with G-force sensors, GPS tracking and even a theft tracker. This splits drivers data into time of day, speed, cornering and acceleration/deceleration, all of which have been tweaked during a 10,000 strong focus group over the last year.
The data is collated and represented via an online ‘Smart Dashboard’ which users are encouraged to use frequently, they have even designed it to work on smart-phones with an inkling of an app in the future if users ‘find it useful’. The four areas are scored from 1-5. If users are scoring 1 or 2 they will receive warnings and tips on how to improve their driving via email and the dashboard, they will also receive an in-depth report 45 days in which will give them enough time to adjust their driving style before the 90 calculation date comes around.
If users manage to score a 4 or 5 after 90 days the policy will be modified immediately with savings of up to 15%, not to shabby when you consider this is pro-choice policy because the Co-Operative is not forcing this on young drivers but giving them the choice to be rewarded for driving safely and by improving their driving over time. David Neave, Director of Insurance envisaged that this will result in an average saving of £328 over leading competitors before any additional discount is awarded after 90 days of safe driving – great news if you drive sensibly. But what if you drive recklessly?
Well if users drive in a moderately unsafe manner a one off a yellow card, or more accurately an email/smart dashboard notification will be issued with the time, date, location and of course reason for the warning. This is used to improve users awareness and is not used to penalise or increase drivers premiums; however if users want to drive down costs (pardon the pun) they should hede the warnings.
For users who breach a ‘red card’ rule an immediate termination will be issued after some human intervention; infractions will include consistent reckless driving such as harsh acceleration, breaking, sharp cornering or excessive or prolonged speeding. This is basically a termination of an insurance policy which would result in a huge increase on any future insurance – the message is clear here, this ‘pay as you drive’ scheme is not aimed at boy racers and if you prefer to drive like your hair is on fire you’ll have to pay the premiums elsewhere – this scheme wants to lower insurance costs for safe young driver and instill a positive ethos for improving driving styles.
I really rated the technology and was impressed with the concept, I can certainly see it catching on and perhaps even coming as standard in the future. This type of gadget could improve driving styles, increase road safety, lower carbon emmissions and in turn both your insurance and fuel costs – we will bring you more news when we have it.
What do you think, is ‘Pay how you drive’ the way forward?