moneysupermarket.com: motor insurance implications of Eddington Transport Study

Commenting on road-pricing and today’s Eddington Transport Study, Richard Mason, director of insurance at moneysupermarket.com, sets out the implications to motor insurance.

He said: “The Government has unveiled its long awaited plan to introduce road pricing to alleviate congestion. This will mean the unpopular ‘big brother’ element of tracking motorists wherever and whenever they drive and it is likely this pay-as-you-drive technology will be the same as that which allows insurance companies to monitor driving habits.

“I believe this will spawn more pay-as-you-drive insurance policies on the market. The technology enables insurance companies to reward careful drivers and lower their premiums by monitoring their driving habits, including how fast people travel, how fast they take corners, as well as where they drive and the times of day they use their cars.

“However, it is evident some drivers are wary and will need time to get used to these ‘Big Brother’ tactics; our research found Britain’s motorists would swerve to avoid this technology fitted to their cars, even if it drove the cost of insurance down dramatically. There is a need for insurance companies to educate the public as more than a quarter (27 per cent) said they wouldn’t even contemplate installing such a device in their car, no matter how much it could save them on insurance. Instead, Brits want to halve their insurance costs before they even consider trying out a black box, with a fifth (20 per cent) saying they want their cover slashed by at least 50 per cent before allowing their driving to be monitored by insurers.

“This technology is likely to reduce insurance costs for safe drivers, but those who do not obey the rules of the road could find themselves paying a fortune for their premiums. With the potential savings that can be made on the cost of insurance, I think it is clear that pay-as-you-drive schemes and black-box technology will be a big part of our motoring future.”