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TheStreet Open House

Over Half (57%) Of All Drivers Expect To Switch To A Telematics-based Car Insurance Policy By 2017 According To Research From Gocompare.com

NEWPORT, Wales, April 19, 2012 /PRNewswire/ --

Fifty-seven per cent of drivers believe they will switch to a telematics or "black box" insurance policy in the next five years, according to a new study* from Gocompare.com.

The study into the relationship between driving habits and insurance found that a wide cross-section of motorists are open to the idea of telematics-based car insurance. In fact, 59 per cent of over 55s said they may switch to one of these policies in the next five years and 19 per cent of all drivers were happy to consider it at their next renewal.

However, the research also identified the issues which have held back the sector until now, including low levels of awareness, the lack of big name insurers and evidence of real savings in terms of premiums and fuel costs.

The survey highlighted the strong underlying support for car insurance premiums based primarily on the way you drive, not on age and gender, with careful drivers rewarded with cheaper premiums:

  • 92 per cent of drivers think that their car insurance premiums should be based largely on the way they drive;
  • 97 per cent think careful drivers should be rewarded with cheaper insurance;
  • 60 per cent think that car insurance premiums should be based on where they drive and the time of day;
  • Only 49 per cent think premiums should be based largely on age and gender.

Scott Kelly, head of car insurance at Gocompare.com commented, "Over the last few years we've seen car insurance premiums reach record highs. The outlook for 2012 is little better with further increases expected, as well as a degree of uncertainty for young drivers once the European Court of Justice gender ruling takes effect; insurers will no-longer be able to take gender into account when calculating premiums.

"Most insurers currently price their policies based on a series of generalisations around claims experience, location, age, sex and the type of car. Most don't consider an individual's actual driving habits until they have built up a record of safe, claim-free or incident-free driving over a number of years and have subsequently earned a no-claims discount. According to insurance companies, young drivers - particularly males - are most likely to make claims and therefore face the highest premiums. The average shop around premium for a driver aged between 17 and 22 is £2,497**, nearly treble the average price. While this group has potentially the most to gain from "black box" car insurance, with an average saving of £521 achieved with insurethebox telematics insurance***, the concept appears to have broad appeal."  

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