On the Car Insurance Blog we strive to advise vehicle owners not only on how to find the correct car insurance, but also to find affordable insurance and save on their monthly car insurance premiums. We have suggested that vehicle owners who tend to drive less consider the benefits of a Pay As You Drive Car Insurance policy. An essential element of such a policy is that the insurer will be provided with data about the driving of the driver.
Is it not threatening my privacy have my driving data divulged to the car insurer?
It has been revealed that one of the biggest insurers in the UK has terminated a flagship car insurance scheme less than two years after its roll out. The Norwich Union’s “pay as you drive” policy used satellite technology to track every journey via a black box installed in customers’ cars. Customers who joined had a black box fitted in their car which constantly fed back data on where and when they were driving.
This resulted in cheaper premiums for people who avoided driving at high risk times like rush hour and late at night. It was expected that many vehicle owners would be attracted as new clients through the offer of lower premiums.
Big Brother concerns from vehicle owners
The Pay As You Drive car insurance product from Norwich Union did however attract fewer customers than expected. Graeme Trudgill from the British Insurance Brokers’ Association is quoted as saying that many drivers did not like the idea of being constantly monitored.
“The customers don’t like the whole Big Brother attitude,” he said. “They don’t like the fact that someone is going to know exactly where they’re going, at what time and at what speed as well,” he added.
Pay As You Drive car insurance and privacy
When considering the question pertaining to PAYD and privacy we need to consider 2 very important aspects – method/ technology used and the target user. We would like to discuss these 2 aspects in a bit more detail:
1. Method used / technology and PAYD
You average driver might have some concerns when his driving and nightly social driving is too closely monitored. This might be true for “high end” vehicle tracking technology which measures far more than the distance that you drive, and includes aspects such as speeding violations, harsh breaking and cornering, GPS locations of where you park and for how long etc…
To enjoy the benefits of a Pay As You Drive car insurance product you need not have this “high end” and “highly revealing” technology in your vehicle. Many PAYD car insurer providers only require odometer readings to record how far you are driving – and have reduced car insurance premiums available for reduced driving distances! This measures how far you drive…and not to where you drive!
2. Target user and PAYD
It is very important to consider the importance of the different vehicle owners and drivers. There is a significant different objective for the individual and the corporate user. The individual user might focus only on a smaller financial benefit as a result of the reduced car insurance premiums – whereas the vehicle fleet owner could focus on hundreds of thousands of rands of savings with vehicle tracking and fleet management solutions.
The individual driver, driving in his own vehicle might be concerned with the close monitoring of his driving and sharing this info with a third party- but the professional truck driver of a large company would have less of an objection to his driving info being analyzed.
Large companies save hundreds of thousands through effective fleet management. These savings are not only on reduced insurance premiums, but also savings on fuel costs, vehicle maintenance costs etc. These drivers drive on specified pre-planned routes and are well aware that they will be closely monitored to deliver loads via these routes on time!
Conclusion and advice
There are significant savings to be made through PAYD car insurance policies – both for the individual owner –driver and for companies with a fleet of vehicles. There is no need to fear a threat to your privacy. Discuss with your PAYD car insurance provider how these data is to be collected and how much data is to be collected.