Telematics Car Insurance

Telematics car insurance is a car insurance product that uses a satellite based GPS unit to gather data on a driver’s habits and skills. The unit is small and about the size of a smart mobile phone and is installed inside the dashboard of the car. Using the GPS tracking, which is extremely accurate, a car insurance provider can gather detailed data on the car’s movement. It is much like the monitoring and data collecting that has been used for years with cargo fleets of companies to monitor the driving habits of their employed drivers.

Insurers noted that this same data could be used to determine the driving habits of insured drivers outside the fleet industry. By using the data they could better gauge the risk associated with insuring a driver. This could result in more accurate premium charges to drivers and could revolutionize the car insurance industry.

Telematics car insurance has developed into a very popular car insurance product and is well received by consumers. Young drivers have especially embraced this type of insurance as it takes them out of the high risk demographic of young, inexperienced drivers and lets the young driver establish their own history of safe driving resulting in lower car insurance products. Young drivers are traditionally saddled with the highest premium costs. Telematics has given them the opportunity to find savings and the ability to afford insurance to enable them to be on the road.

The wide and growing acceptance of telematics car insurance has brought new specialized car insurance providers into the market. Where there was once only one insurance provider offering this product there are now many and the number is constantly growing. Now established car insurance providers are developing their own unique branding of telematics car insurance in an attempt to enter this growing market.

Telematics car insurance may be the correct technical naming of the product but it has come to be known by many names such as black box car insurance, GPS car insurance, smart box car insurance, pay as you drive and usage based insurance. The names either reference the GPS unit itself which is usually a small black box that uses smart GPS technology or it references the trend of the insurance being a prepaid service.

The insurance is prepaid and drivers purchase a unit of miles. This addresses the concern that insurance providers have as to the more a driver is on the road and the more miles they cover the more opportunities there are for an accident. This helps a driver pay for the amount of miles they actually drive. If a driver runs out of miles then they can easily purchase more units of miles much like a consumer would purchase more minutes on a prepaid mobile phone. Most make these purchases of more miles online which is easy and quick to do at the convenience of the driver.

Along with the insurance being based on mileage driven in most cases the data gathered is used to determine the safe driving habits and skills of a driver. Data that could be collected and considered by an insurance provider to determine risk would be a driver’s rate of speed, their habits at quick and rapid braking, taking corners quickly, and the hours a driver tends to be on the road. Insurance providers then give breaks in premium costs or they reward extra miles to a driver that exhibits good driving habits and to those that stay off the road at night time. Night time is the most likely time of the day for a car accident.

While the drivers most likely to see a substantial break in their premiums are those that are generally penalized by being in high risk demographic groups such as males or young drivers, there are others that could benefit as well. Anyone can find that they can save on an insurance policy and more accurately pay for their coverage by truly paying on a premium based on the miles they drive and their skills and habits as a driver. So while young drivers benefit the most from telematics car insurance by no means are they the only ones that can find it financially beneficial.

Another unique feature of the car insurance product is that the majority of the insurance providers offer the gathered data online for the driver to review. Through this review of their data they can keep up with the miles driven and when they will need to top up on miles. They can also determine what driving habits they can correct to save them more on their car insurance. For instance by staying off of the road between the hours of 11PM and 5AM a driver can save a lot on their insurance costs since this is such a high risk driving time according to statistics used by providers to determine risk in insuring a driver. The data is also very effective in helping young drivers determine if they should seek out further instruction in their driving skills and how they can correct their habits to become not only better drivers but in the course of doing so save money.

UK drivers have been experiencing increases in their car insurance policies and the telematics car insurance is allowing drivers to step out of the conventional way of paying for car insurance. Instead of paying for risk determined by statistics as to the customary behaviors of a particular group the driver fits in they are allowed to pay premiums based on their own needs, usage, and driving habits. Savings can amount to hundreds of pounds for most drivers. Telematics car insurance offers drivers much more control over their car insurance costs instead of them being dictated by statistics and out dated risk assessment.