Insurers will know be able to track drivers that are texting or making phone calls illegally. This in turn would increase insurance premiums for those who were breaking the law.
This would be monitored by existing “telematic” underwriting (this allows insurers to assess policyholders’ driving habits and skills). They would monitor if users phone’s are in use or if they are connected to a hands-free device.
The telematics box involves drivers being tracked via their mobile phones through an app they have downloaded. This technology tells the insurer when and where the vehicle is in use and can tell insurance companies detailed information about braking, acceleration and cornering.
Drivers with convictions for texting or calling at the wheel already face rises in their premiums – but this technology enables insurers to increase premiums before an accident has even happened.
Data from the AA shows that insurers put up premiums by as much as 28% if a driver is caught by police using their phone at the wheel.
There is an increase in the use of telematics because they can offer a discount to younger drivers who often face high insurance policies. According to the British Insurance Brokers’ Association, telematics policies have grown by 23% over the past year and are now used by 561,500 drivers.
Out of this total figure there are 25% of the policies are through apps that work on smart phones. The remaining policies are monitored through “black boxes” which are installed into the cars.
There have been complaints that driving behaviour has been recorded incorrectly and this could be an issue.
Selim Cavanagh of Wunelli said the company collected phone data on behalf of some insurers, but declined to name them.
“The objective is twofold: firstly, enable insurers to price fairly; secondly, educating the driver to these road risks,” he said.
Drivology initially told Telegraph Money that it collected phone call data and used it to determine premiums, but later backtracked and said it did not.
Simon Morrissey, head of data and privacy at law firm Lewis Silkin, said insurers needed to be more honest about data collection.
“That type of ‘cross-pollination of information’, where one app knows what you’re doing on other apps, creates a privacy issue. In my view, if they know that you’re using your phone while driving, that is intrusive,” he said.
Jonathan Hewett of Octo Telematics said his firm was working on the “next wave” of technology, which would overcome these issues – and he was confident that more insurers would start to use the technology.
“The only resistance is a perception that it would be a barrier for consumers. There’s concern that they would see it as a Big Brother scenario,” he said.
“But there is also huge concern from insurers about distracted driving. Our current clients are interested and the topic is increasingly in everybody’s mind.”
In November the Government doubled the penalty for drivers caught making calls at the wheel to six points and a £200 fine.
New drivers will face an immediate disqualification if apprehended.
If you are looking for Motor Fleet Insurance then do not hesitate to contact a member at Todd and Cue on 0191 482 0050 or email info@toddcue.com.
