How telematics reduces car insurance premiums
Until now, a few good ways to recuce your car insurance premiums included adding security devices to your car, driving safely to increase your no claims discounts, and owning a standard model vehicle…but things are changing.
The latest way insurers can calculate your premiums is using a telematics (telematics = telecommunications + informatics) device that is fitted to your car to assess your driving behaviour.
So rather than assumptions based on a past customer data, the cost your premium can be based on how well YOU drive. If you’re a responsible driver – you get to reap the benefits and savings can be made.
How does it work?
Telematics units on your car work through GPS. They can monitor how fast you are driving, your brake reactions times, how fast you accelerate, even how fast you take corners.
Why use it?
• You could get cheaper premiums based on good driving
• Accurate data showing how often and how far you drive – if you don’t use your car much then telematics could be ideal for you
• Accurate data showing the time of day you drive – if the majority of your driving is in daylight (with better visibility) this could mean lower premiums
• It has vehicle tracking to help with recovery if your car is stolen
• Accident data helps in any liability disputes
Who should use it?
Currently statistics play a big part in calculating insurance costs. A 17 year old driver with a P1 licence is four times more likely to be involved in a fatal crash than a driver over 26 years. However this doesn’t mean that every young driver is reckless and should be charged high premiums accordingly. A telematics device is a good way for young responsible drivers to prove they drive sensibly and be rewarded for doing so.
It’s ideal for:
• inexperienced drivers;
• those who don’t drive very often (but would usually be insured based on an approximate number of kilometres);
• and young drivers under the age of 25.
Although in theory anyone who drives well could benefit from savings.
Why shouldn’t you use it?
Telematics isn’t necessarily for everyone. If you value your privacy you might not want your insurer knowing where you are 100% of the time!
Where does it go?
The device can go anywhere on your car – the less obvious the better. If your car is stolen, you can use it to see and track where your car is, so for obvious reasons you don’t want it in an easy-to-find place.
Where can I buy it from?
Telematics is a fairly new product in Australia and so at this time it’s not widely available. But experts expect a ‘growth spurt’ in the next 5 years.
AI’s Smart-Box Good Driver Insurance Product and QBE’s Insurance box are 2 of the first insurers on the market to be using the technology to calculate premiums.
Watch out for new telematics insurance products appearing on the market soon…we’ll be comparing them in no time.
Not keen and still want cheap car insurance? Our top saving tips can help you save!
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