PH INVESTIGATES: BLACK BOX INSURANCE
'The price of freedom' says one provider of telematics insurance - one we're willing to pay though?
Telematics insurance was launched into the mainstream in 2006 by Aviva, again aimed at lowering costs for younger drivers by offering a PAYD (Pay As You Drive) scheme based on how much and when you drove. But it didn't last long. "Lower than expected take up, high technology costs and a market with much cheaper premiums than today significantly weakened the commercial viability of the previous product," an Aviva spokesperson told us. "The PAYD product allowed us to really understand driving behaviour and identify very accurately the risk profiling at an individual customer level. In addition we also learned why the product was not appealing to the 'mass market'."
Aviva has learned from the experience and is now looking at launching a more limited app-based policy that records your driving for a fixed period, from which your premium is then calculated. "Technology has developed significantly since then," said our spokesperson, "as well as consumer awareness and acceptance of usage based insurance offerings."
"The tipping point, where telematics policies gain real mass market appeal, is yet to come," he says. "But as the technology matures and becomes more readily available and as understanding grows, telematics-based policies could prove to be one of the most important developments in the car insurance industry."
Our story on the C1's black box offering attracted over 300 comments, many with serious concerns about the system's ability to 'mark' your driving and penalise you on future premiums on the basis of harsh acceleration, cornering or braking; the latter, in particular, a cause of much concern among PHers. Does that mean, for instance, if you brake suddenly when a child runs out from behind a parked car you'll be penalised for 'bad' driving?
And what if someone else - parent, sibling, mechanic on a 'test drive' or similar - rags your car without your knowledge? "The Safety Score is calculated over a two-week period where the driver has driven more than 150 miles," we were told. "These isolated incidents are unlikely to have a big impact on the Safety Score as they will be diluted by the other miles the policy holder(s) complete. In any event, the vehicle owner should make any technician/garage aware of the black box in the car which would act as a deterrent." Your black box, your problem in other words. The full Q&A makes for interesting - and occasionally scary - reading too, especially given reports of data upload errors from some early adopters. See here for the full transcript.
Citroen's offer is, of course, opt-in and, for some perhaps, that necessary evil if it means affordable insurance. But what if you want to retrofit a black box to your car? Companies like Autosaint, a subsidiary of Fresh! Insurance, offer just that. Given that these companies are amassing a huge amount of data about you and your driving habits you'd like to think they're accountable, right?
Many on the original thread commented 'thin end of the wedge', and the fact Go Compare's Scott Kelly sees huge potential for older 'Sunday drivers' who don't travel during busy peak periods or late at night to make big savings indicates that it's not just aimed at young drivers. And, therefore, likely to become ever-more prevalent in your future insurance ring-around. You have been warned.