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Telematics - the key to young drivers' insurance quotes?

25 Apr 2012 at 16:49

If you’re a young driver – say, 25 years or younger – you’re undoubtedly aware of the extortionate costs for 12 month’s cover against the risks of the road.

Statistically, new motorists are 10 times more likely to be involved in a crash, and in conjunction with compensation claims bumping up the price of premiums, young drivers are paying serious rates for yearly car insurance.

Car insurance companies claim they actually lose money by having newer drivers on their books, but now fledgling motorists can help cut the almost prohibitive cost of insuring a car thanks to a new piece of technology.

It’s called Telematics and, in a nutshell, it uses satellites to watch a young driver’s every move – but how can a little black box morph into tangible insurance savings, you might be thinking?

The system has been co-developed with the Williams F1 Team and uses GPS data and accelerometers to record how the car is being driven.

The control box is mounted somewhere behind the dashboard and feeds back the info to your insurers, where a real person will assess your driving style and therefore grade your risk.

Those who drive to the letter of the law, without recording incident, will be rewarded by chunky discounts on their insurance. Those who don’t, and prefer to use the right pedal more liberally, could find the great expense of motoring continuing.

Telematics could be the solution to bogus whiplash claims, too. The new tech can provide crash data to disprove spurious injury claims following an accident, helping to squash premiums further for everyone.

Whether that would actually be the case, or insurance companies would simply leave premium prices untouched, improving their margins, only time will tell.

While it could reduce costs, fitting a telematics box will be a trade-off for younger drivers – the system can also be used to impose curfews behind the wheel.

It’s a balance, but if you’re under 25 (above which fully-comprehensive insurance premiums start to get sensible) it could be the answer to the endless quest of how to get your freedom for as little cash as possible. You’ll just have to disprove the stereotype first... by getting out there and driving!