The future could see all vehicles equipped with advanced telematics software which can update insurers in real time about the driver’s behaviour. Quotes will be based on the results and careful motorists will be rewarded with cheaper protection.
The sophisticated system has the potential to inform insurers of things like average speed, distance and hard braking frequency. BMW plan to install the systems into all their new cars by 2015. Telematics software works in a similar way to GPS navigation and calculates the data, before forwarding it to the insurer who can run assessments accordingly and quote people with much more accurate and fair insurance quotes.
It is particularly useful for firms seeking motor fleet insurance because they too can examine the driving patterns of their staff. With fuel consumption being monitored in real-time too, companies can address eco-friendly drivers and encourage others to follow their lead.
If a company car or truck is involved with an accident, the software can be used to judge the driver’s responsibility in the incident. It is a major step forward for the industry but there are teething problems predicted. For example, moderating responsibility in an accident can be difficult if only one of the vehicles involved is equipped with telematics software.
Still, discussing the benefits of telematics with a qualified insurance broker is the best way to decide if a business should opt to install the software to its vehicles. The Insurance Times takes a positive standpoint on telematics, highlighting its advantages on top of its aid to fleet insurance i.e. improved analytics, fuel efficiency and fraud prevention.
An indirect negative is that the software itself needs to be insured and can be exempt from cover with certain policies. Again, experienced brokers listen to specific requirements and make sure the package received protects the vehicles in question for everything – these are the best people to speak to regarding new insurance-related technologies.