Car insurance: Why pay when you are not driving?
Ben Hackney-Williams, 14th December 2018, General
Stop paying general car insurance and price a policy only on when you actually use your vehicle
The car insurance ecosystem is going through a transformation that will lead to policy changes in both industry approach and customer servicing. Advancement of technology is often talked about in the news, but the benefits for the masses are only going to become more prevalent.
Around $5 billion is currently invested in insurance tech start-ups, and over 10 times that in insurance tech spend. Global figures show that disruption to what we know as a traditional car insurance policy is only going one way – towards the growth of insurance technology and advancement of digital innovations within the industry.
The future of car insurance
Insuretech is a way of getting you cheaper car insurance based on telematics and how you actually use your car, rather than generalising lifestyles to come up with a policy price.
Often that can bring down the price of your car insurance. Telematics car insurance policies use your own driving data to record when, where and how you drive. This approach is also known as black box car insurance. These 'less you drive, the less you pay' policies are becoming increasingly popular, particularly with younger drivers as a way to reduce the price of premiums and also ensure safety on the road.
Only pay insurance for when you use your car
Simply speaking, there are two aspects of car insurance that make a difference to your overall policy price per year – your fixed cost when stationary and the variable cost of when you use it, what for, and how many miles you travel a year.
With these new insuretech policies, you start with a price based on what you need to pay when your car is parked, and then every policy is tailored to a per-mile rate to cover you when you're driving.
How does the tracking work?
Whether it's a black box or smartphone tracking system, any car insurance policy is still based on risk. The difference is that tailoring a policy based around actual recordings and figures means that there's a tangible way to charge a fixed fee covering fire and theft, but vary anything additional on actual use. It's ideal for anyone that leaves their car parked for long periods of time. Some companies even offer a pay-as-you-go car insurance policy rather than charging an up-front annual premium.
The other benefits of tech tracking
Having tailored insurance policies through using technology bring a host of other benefits when it comes to providing specific updates and information about your car.If tracking using a smartphone, for example, through push notifications, in-app updates and other reminders, you can get a heads up on your tax details, MoT status, plan for journey costs and ensure your vehicle stays in good health.
You can even use your phone to help you find your car, should you forget where you've parked it. Although, if that happens too often then you've probably got bigger things to think about before you worry what you're paying for the specifics of an insurance policy.
