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The Increasing Popularity of Miles-Based Cover

April 11, 2012 | Comments: 0 | Views: 134

Many leading insurers, are now offering young and low-mileage drivers a way of saving money on what could otherwise be an expensive motoring outlay.

Using an unobtrusive little device called a telematics box, which professional box fitters carefully fix behind a car's dashboard and connect without damaging the look of the car, the insurer is able to monitor a policyholder's driving habits.

Although the introduction of such technology has sparked conversations about 'big brother' and invasion of privacy, the goal is to render the roads a safer place and make car insurance more affordable.

By providing motorists with data on their behaviour behind the wheel via a personal online Portal, insurers can help them rectify any poor driving skills they may have and build up their positive motoring skills.

The only people able to view the information collected about a policyholder's driving habits are the insurer and the policyholder themselves. Who else the driver chooses to show is entirely up to them, but many choose to show family members as a way to reassure them that they are a responsible driver.

With a pay-as-you-drive policy, a road user will have a set number of policy miles for the year. They can receive more miles by either earning bonus miles through safe driving, or by buying top-ip miles to extend their cover.

As a miles-based policy this type of cover works best for people who are considered to be low-mileage drivers, that is to say that they drive 6000 miles or less annually.

Newly-qualified motorists, and more experienced drivers between the ages of 17 to 25, will be able to save money on their annual premium by agreeing to have telematics technology installed in their vehicle.

By making sure that they do not brake harshly or accelerate suddenly, for example, young motorists will not only be driving more economically but be able to earn a greater amount of bonus miles.

This system of monitoring and then giving the driver information on their motoring habits promotes self-improvement on the motorist's part, with the added benefit that this will reduce their carbon footprint, reduce the risk of being involved in an accident, and reduce the cost of their cover.

Plus, telematics provides insurers with the potential to guide the police to a policyholder's car if it is stolen, and may also mean that in the event of a severe accident (judged by the G-force created by the collision) the insurer can, under specific circumstances, call the emergency services following the incident if they cannot contact the driver - another reassuring feature for concerned parents.

A report by comparison website Gocompare.com in March 2012 predicted that by 2017, around 57% of all UK motorists would have a telematics insurance policy. The firm questioned 2000 British road users and more than 50% of them said that they were likely to swap their current insurance for a telematics-based policy in the next five years or sooner.

The rising cost of cover for many drivers, not forgetting female motorists who are expected to see a significant increase in the price of their insurance due to the EU gender equality ruling, is likely to mean that miles-based cover becomes more popular amongst road users.

Once insurers are no longer allowed to price annual premiums using the policyholder's gender as a money-saving factor, the best way for safe motorists to be fairly assessed by insurance firms, and receive a quote which matches their driving skills, will be via a telematics based policy.

For more information visit the insurethebox car insurance website.

Source: EzineArticles
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