Young drivers have been handed a lifeline by insurers with a new piece of technology that could reward them for safe driving with lower car insurance premiums.
At a time when the car insurance industry is reeling from the European Court of Justice ruling against gender being used in risk calculation, the Co-Operative Insurance has shaken things up further with the announcement of its new Young Drivers Policy, aimed at the 17-25 age range, which will use telematics – black box satellite technology – to monitor the young person’s driving behaviour and feed it back to the insurance company for them to then assess risk.
The Co-Op claims that this approach will save around 83 per cent of young drivers an average of £328 through what is being called ‘Pay-How-You-Drive’ technology, based on the GPS signals sent from a ‘Smartbox’ fitted to the car back to the insurers via a satellite feed.
Young drivers’ performance will be assessed every 90 days and they will receive a “safer driving discount” worth up to 11 per cent of the premium if they demonstrate sensible driving, on top of the regular No Claims Discount that will still apply.
The Smartbox will work by sending satellite signals with information about speed, braking and acceleration, cornering, and the time of day the journeys are made. If the driving turns out to be irresponsible then young drivers could see their annual premium increase by up to 15 per cent.
Young motorists will also be able to log into their unique 'Driving Dashboard' online to check how their driving has been rated against the four behavioural categories, with helpful advice offered on where they’re going wrong and how they can up their score for a lower premium. Each category will be colour coded and will be displayed in the form of a speed dial infographic, with green being good, amber good with errors, and red indicating bad driving.
Speculation is now circulating as to whether the ‘Pay-How-You-Drive’ method of calculating insurance premiums could be rolled out across all age groups to calm the storm that has been brewing around the ECJ ruling and the introduction of Continuous Insurance Enforcement that prevents cars from being uninsured even if they are off the road.
Graeme Trudgill, BIBA’s head of corporate affairs, has commented on the effects that will no doubt be felt by safer young drivers.
He said: "Male drivers under 21 are twice as likely to have an accident than a female under 21. The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums."
An article from moneysupermarket.com car insurance news, however, warns that young drivers who are not able to drive safely under the new scheme may face even higher premiums than those from other insurers.
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