Drive well, Pay less!
Motor insurance based on the way you drive
Airmax has been at the forefront of ‘Insurance Telematics’ from the start. Indeed the very concept of black box monitoring of driver behaviour was patented by us in 2007:
Patents granted to Airmax: Method and system for driver style monitoring and analysing
- GB2434346 – Pay How You Drive
- GB2470146 – Pay How You Drive (Div I)
- GB2470147 – Pay How You Drive (Div II)
- GB2461044 – Drive For What You Have Paid
However Airmax has not actively entered the insurance telematics market as this market sector has not been seen as critical or strategic to Airmax’s business objectives. Airmax does offer enhanced driver reports for fleet managers and they are often self-insured.
Airmax has always considered that distance or driver behaviour based reports, when used as a premium calculator, as more of a marketing initiative used by insurance brokers and insurance companies rather than a real and useful technology. It has its place, there is no doubt, but it is a monitoring technology and not a preventive one.
Surveys routinely find that around 80% of drivers think of themselves as being of “above average” ability; especially drivers under 25 years of age. Telematics insurance perhaps offers a USP to those insurers wishing to attract new and lucrative business and Airmax concedes that it can be a useful educational and awareness tool for young drivers.
Calculate Insurance Premiums
To calculate insurance premiums underwriters have traditionally used crude demographic data such as:
Where you live by Post or Zip code.
The type of vehicle you drive: Insurers consider the make and model of your vehicle in terms of what the risk factors associated with it might be. For example, some makes and models fare better in collisions than others, meaning injury to the occupants and damage to the car end up being less severe. Also, newer, more expensive vehicles cost more to replace, so they are more expensive to insure. How you use your car: The more time a car spends on the road, the higher the chance of an accident. That means higher premiums if you drive a lot, you drive long distances or you drive to work every day.
- Your driving record: Your driving record has a big impact on the premiums you pay. For example, a long driving history with no accidents can help keep your premiums down, and every accident where you are at fault may push your premiums up. Speeding tickets and other violations may also increase your premiums.
- Your statistical group: Depending on where you live, your insurer may consider the claims history of the group to which you belong as a driver – for example, the group of drivers of the same age and in the same geographic location. If you belong to a group that is more likely to make claims, your premiums may be higher.
- You age and gender and business and private usage.
- Night driving.
The above personal data is still collected by the insurer but as a variant of this fixed premium model an alternative is to monitor both the vehicle and the driver behavior giving a personal profile and how it relates to risk. These days this may be by collecting data from ether an embedded or no embedded system. In the USA, the focus is on distance driven, or in Europe “pay-as-you-drive” has taken the analysis still further. Participating customers can be offered a discount ranging from 10% to 40% off a standard rate.
Some also hail telematics as a way of improving driving standards, by making drivers more aware of when they are behaving dangerously. Black boxes can be made to beep when a vehicle brakes too heavily, for example. They can alert emergency services after a crash, too.