Insurers scramble to minimise impact of claims with new tech

The insurance industry is working overtime in regards to finding new ways to minimise the impact of whiplash-related personal injury claims, with new hope on the horizon that technological advances may pave the way to reduced costs for insurers and drivers alike.

Personal injury compensation claims for whiplash add around £90 to the price of the average motorist’s insurance premium. Combined with the £30 a year that uninsured drivers add as well – and the extra £225 million in costs that needs to be distributed to the nation’s drivers due to what the Office of Fair Trading calls ‘dysfunctional’ levels of competition, insurers are passing along massive costs to their customers and still are deep in the red.

However, telematics-based insurance, which utilises technology similar to that employed by satnav devices, could be the hero the insurance industry needs. Consisting of a small black box about the size of a pack of playing cards, the telematics device is fitted to a motorist’s vehicle and keeps track of his or her driving habits, feeding information constantly back to an insurance provider in order to analyse your behaviour behind the wheel; motorists that demonstrate safe driving habits can reap the benefits of as much as 50 per cent off their current premiums in return.

Of course, the reverse is also true: if you’re an unsafe driver and take risks while you’re on the road, such as consistently exceeding the speed limit, take corners aggressively, and accelerate and stop with too much force, your insurer will look at the data, decide you’re a high risk driver, and raise your premiums accordingly.

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