AA Insurance is the latest to turn to technology, with the launch of a new ‘pay how you drive’ policy. Called AA Drivesafe, it provides the tools to help drivers, especially new and inexperienced ones, improve their driving safety.
AA Drivesafe tracks driving behaviour using a small electronic ‘Drivesafe Box’. The data collected is then presented to users in a way that will help them improve their driving safety and, in so doing, can lead to lower insurance premiums.
Simon Douglas, director of AA Insurance said, “It is likely to appeal to inexperienced drivers as well as parents, whose youngsters have their first car. Parents know driving behaviour is being tracked by a system that also provides crash, breakdown and theft alerts.”
While the product is currently only offered through three insurers, Mr Douglas says that more will be added, making AA Drivesafe more competitive.
AA Drivesafe is launched at a time when young drivers are expecting sharp rises in the cost of car cover as a result of a ruling by the European Court of Justice (ECJ) that will outlaw use of gender to calculate insurance premiums after 20th December.
A number of other insurers have seen the opportunity to recently launch similar products.
“After this, I believe telematic insurance technology will come into its own,” Mr Douglas says. “And young and inexperienced drivers stand to benefit most.
“At present, young women can expect to pay up to 40 per cent less than their male peers for car insurance. Although young men are statistically more likely to have a serious crash than women, that doesn’t mean that all men drive aggressively. Similarly, some young women also take risks when they’re behind the wheel.”
The product will include an online ‘dashboard’ where users log on to find out how they are performing under four separate categories:
– Anticipate traffic (smooth deceleration / braking)
– Follow landscape (cornering)
– Where and When (types of roads and time of day)
Another benefit of the product is that In the event of a breakdown or a crash, or if the car is stolen, the AA can also identify exactly where the car is.
Mr Douglas continued, “Although the initial premium may be little different to a conventional policy, the safest drivers could see their premiums fall quickly. As with standard polices, no-claim bonus applies and any premium reductions for risk-averse driving are in addition to that.
“A new driver with their first car could see premiums fall faster than the 30 per cent or so they might expect from their first year’s no-claim bonus alone, after a year.”