Black box technology offers lower car #insurance premiums for young drivers. But who sees the data?

The launch of the Motaquote’s Fair Pay Insurance scheme is the latest attempt to more accurately price car policies so that younger drivers are treated as individuals rather than merely a member of a high-risk road-user group tarred with the same brush.

The company’s tie-up with sat-nav provider TomTom will allow members of the most vulnerable group on the road to reduce their insurance premiums by being better and safer drivers. Black-box technology – bought upfront by the driver for £299 – will record several factors related to bad driving behaviour and hence risk: speed, braking, time and location, cornering and types of road. Drive smoothly and carefully, during the least dangerous parts of day and you will benefit from lower premiums. Drive aggressively and dangerously and at night and you will be penalised financially.

Other firms offering similar schemes include Smartbox from Co-op Insurance and Insurethebox. Norwich Union also trialled the idea several years ago.

In principle there should be a big market for these products. According to data from Confused.com, at the end of 2011 the average third party, fire and theft policy for men between 17 and 20 years of age was an eye-watering £3,413. For women it was £1,782.

It is not difficult to understand why the premiums are what they are. Young drivers – especially males – are far and away the most likely to be killed or seriously injured in a road accident. More generally those in the 15-24 category are four times more likely to die in a road traffic accident than from drug, alcohol or other substance abuse poisoning.

Given that schemes like Motaquote’s are voluntary to sign up to, privacy issues are unlikely to be a major problem. Indeed better recording of time, place, speed, etc. offers drivers the chance to prove they are in the right should they be involved in an accident responsibility for which might be disputed. But it does raise questions as who else gets access to the data – other than the insurance company – and when.

According to Motaquote’s Ian Brown:

“The police would have to complete a formal data protection information request form for the prevention and detection of a crime, so it would have to be for a serious incident. In the five years the firm has been running its other telematics-based proposition iKube we have never been asked for data related to a simple speeding offence.”

Anything that brings premiums down for good drivers has to be a good thing. It will also do something to compensate for the European Court of Justice’s ruling that from the end of 2012 gender-based insurance pricing will not be allowed. The big question is: what does all this mean for those young drivers who do not sign up for this type of monitoring? Will they actually see their premiums rise yet further as insurance companies regard them as having something to hide?

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Drive 4 Safety

I’m writing this from the train on the way back from a very high-quality presentation organised by Strathclyde Police and Road Safety Scotland. Like every organisation involved with road safety, the Strathclyde force is concerned about the number of newly qualified drivers coming to grief on their roads and this seminar was held to launch a new campaign, “Drive 4 Safety.“

Being neither a young person nor a parent I wasn’t in the target audience but I was very impressed by the event, especially the afternoon session which showcased a presentation developed by the South Ayrshire Community Safety Partnership called “Reckless Driving Wrecks Lives” – a short film about 4 friends, out in their car for a night and the consequences that unfold from simple decisions – seatbelt or not? – reckless overtake or the safe option? At key moments the film stopped and a member of the emergency services, a bereaved parent and a road crash survivor stepped forward to give their own testimony – what is it like stepping from A and E to meet a parent and tell them that their son couldn’t be saved? What is it like going out from the fire station on a wild, rainy night to try and cut a teenage girl free from the back seat of her boyfriend’s car? How do you come to terms with the fact that your decision not to wear a seatbelt one night has left you in a wheelchair for the rest of your life?

I always think “there but for the grace of God” on such occasions because I’ve been down a country road upside down in a Mini Metro which turned over in a corner – my friend behind the wheel wasn’t bad, or particularly reckless, or under the influence of anything except a mismatch between his ambition and his ability. In another world we weren’t lucky, didn’t land safely back on the wheels in an open field, I didn’t make it to 20, and it’s my dad speaking to an audience of solemn teenagers about how it feels to bury your child.

As the conference took pains to point out, getting a driving licence is a great thing. It’s the first step into the adult world. It’s freedom, it’s independence and it’s instant kudos with your peer group. Hopefully campaigns like this one will cut the number of people for whom it’s also a death warrant.

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