A monitoring device which keeps track of how motorists drive could lead to lower insurance rates in the United Kingdom, according to industry analysts.
Known as “black boxes” – they are a more rudimentary version of the ones found in airplanes and ships, and can keep a record of speed, braking and acceleration. They work via satellite and telematics technology.
Their use may “significantly cut” insurance rates for many drivers, according to a recent statement from Short Term Car Insurance.
The company said the device in a car could have a particular impact on costs for younger drivers. Insurance companies in several parts of the world suspect younger motorists display riskier driving habits. Premiums for U.K. drivers between 17 and 25 years of age have recently increased. But the black box, which focuses on skills instead of age, may end up leading to premiums getting lowered by more than 50 percent, according to Short Term Car Insurance. In fact, the reductions in premiums may be found in just two months, the company claims.
“With the price of petrol rising, and premiums at an all-time high, many young drivers are penalized simply because of the category they fall into but this could be changed by the introduction of telematics technology.” according to the Short Term Car Insurance statement. “The information collected by this device will be used to calculate premiums.”
As a result, the lower costs for insurance could lead to improved driving among teens and young adults.
In a related matter, TMCnet reported that a recent survey from U.K.-based Quote Me Today shows that over 50 percent of their motor trader clients said they were considering shifting to a telematics-based insurance over the next five years. Quote Me Today is a broker of insurance companies.
The interest in black box technology is just not limited to the United Kingdom. For example, South Korea’s motor vehicle telematics market is expected to reach a peak growth from 2012 to 2015, according to TMCnet, citing data from Frost & Sullivan (News - Alert). In the United States, there was a bill in Congress to have black boxes in cars starting with 2015 models. They could record data that could be viewed later in case of an accident or litigation.
Edited by Jamie Epstein