'Pay How You Drive'
Car insurance brought in for young drivers.
By acclaim driving team on 23rd August 2011 in News
'Pay how you drive' is a new type of car insurance that companies are targeting at young newly qualified drivers.
The insurance companies test how safely the new young driver drives and the idea is the better they drive, the cheaper their car insurance becomes. On the flip side, if their driving is not up to scratch, it's going to cost them.
A couple of companies offer this type of car insurance with more expected to follow this year. It's aimed at under-25s, these drivers are usually hit by the highest insurance premiums.
The latest to offer is by an insurance company who've launched 'smartbox'.
The technology
The ‘smartbox’ is the same size as a mobile phone. It uses satellite technology to track how, and when, young drivers are using their car. It looks at acceleration, braking, cornering and speed, as well as times of journeys.
The information is then displayed on the policyholder's online dashboard, where they can log on and get their rating; from five (excellent) to one (very poor).
The premium is then re-calculated every 90 days.
Driving well can get the driver a discount of up to 11%, driving badly can cost the driver an extra 20% on their insurance premium.
Comments by a New Driver - "I passed my driving test last September. I was getting quotes of up to £2,000, which I couldn’t afford at all. "I didn't think it was an amazing idea straight away. I had to ask a few questions like what it was rated on, how many incidents I could have.”
"But when I looked into it I thought, 'Actually it's quite good', it's making me a really safe driver and it's helping me save money.”
"I don't tend to speed at all to be honest, even before I had the black box.”
"It does get frustrating when people are behind you and trying to push you along the road.”
“On the good side I get complimented on my driving because it's really smooth.”
"It's like you're driving to impress your examiner on a driving test.”
The Insurance Company’s Comments;
"The challenge is that young drivers have too many accidents and, because of this, the cost of insuring them is very, very high. If we reduce the number of accidents we can lower the costs.”
Young drivers who've just passed their driving test are a very high risk for insurers. We are told that an average premium for this product is about £1,200.
The insurance company expect around 45% of young drivers will get the 11% discount, and a quarter will get the loading of up to 20%.
What it's aimed to do is to educate those drivers so they can go online every day and see how they're driving and help to improve their driving.
The insurance company also send emails to give feedback on the drivers performance.
acclaimdriving comments: "We think it's a good idea as it shows the young driver how good or bad their driving is. It should also help to cut down on accidents and make them better and safer drivers.”
At present all new young drivers who want to own their own cars are being penalised by insurance companies who set very high premiums for these drivers, this new type of insurance for these drivers is a much fairer way to set the cost of these premiums. Many more young drivers will be able to afford to own their own cars under this scheme and acclaimdriving fully endorse this type of insurance scheme.
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