Heard a piece on the radio earlier this week about pay as you go insurance, ie the more you drive the more you pay. Was wondering what the BR thought on this.
It is a scheme that Norwich Union are considering (I am sure that there was mention of this a few years back) where they install a Black Box to see how far you drive and at what time of the day. It did not mention anything about speed but as it works out how far you have driven and at what time, anything over 70mph might not go down too well!!
The reason behind this scheme is basically sound. In order to reduce (or halt) ever increasing premiums, they thought that this would be a great benefit to policy holders.
Personally I am only worried about the Big Brother bit, purely because I drive over 70mph on the M-ways, although having seen 5th Gears crash test the other day I might have to review my driving habits, especially as I have passed the age where I think that I am immortal.
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Things seem to be on the move in the Insurance Industry to recoup cash.
This snippet, for which I cannot vouch, but comes from an ex Snowdrop at Margate.
Local Constabulary are checking unoccupied vehicles with goodies on open display. Check the VRM against records and they find the name of the Insurance Company who they advise about the risk.
Result no doubt an increase in premium???
DVD
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Difficult one to call, this, without more detailed knowledge of how the pricing structure would work.
Insurance on a £-per-mile basis would obviously be more popular with some motorists than others. But whether low mileage punters necessarily represent a lower risk to the insurer is debatable. There's a sound argument for a reduction in risk to be accumulated over a number of claim free miles, which I'm sure has been discussed before.
Perhaps the black box needs to feed back GPS co-ordinates as well, with an even greater Big Brother implication. Mind you, I'm sure "they" know where I am by tracking the control signals to/from my cellphone ;-)
Ed
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They already do this in a basic sort of way, because you tell them how many miles you think you're going to do. The more you put the more you pay!
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They already do this in a basic sort of way, because you tell them how many miles you think you're going to do. The more you put the more you pay!
This doesn't quite work, if you double the mileage you drive, it won't double the premium you pay. part of the premium is relating to theft, which usually doesnt ocfcur while driving.
Would this system mean that if you drive into a higher risk area you would pay more, especially if you parked up for a few hours?
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i heard the Norwich Union man explain how the trial would work. He emphasised that they would gather information from the black-box trials to work out which type of driver was less risky; and said that in their experience the low mileage local driver is a higher insurance risk than the high mileage motorway driver. He quoted some figure of the risk per mile between the two types of location being quite a large numerical factor. He indicated they would charge less for motorway miles than for trips to the local supermarket.
The aim of the trial is to work out a mechanism for working out a viable commercial charging structure if the experiment is successful.
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The whole idea of insurance is to spread the risk over as many people as possible I would have thought. Its like folk who now find themselves in a flood plain cant get house insurance. When the companies start to get too picky the industry will falter because there is no one they want to insure. Technology is helping them to be extra picky, OK for someone who fits into the narrow band the company chooses, they get a lower premium. This puts up the premiums for everyone else, so they choose not to insure and then cause trouble for everyone else. I can agree to some banding such as age and city or town living but this is starting to get silly.
Bill
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>>> The whole idea of insurance is to spread the risk over
as many people as possible ... Bill <<<
Where did you get that idea from? The whole idea idea is to try and make a profit.
The premiums for any commercial (as opposed to state sponsored) insurance (home/life/car/health/employer-liability/etc.) are based on an assessment of the risk and what a particular Insurer is willing to charge to take on that risk in the hope of making a profit.
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Should be incredibly popular once a device is marketed that tells the box the driver isn't really doing 140 ;)
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Don't need to worry about no insurance idea.
Basis of insurance is that insured is risk averse and insurance company is risk neutral. Therefore the more they can specify you down the more your premium will reflect you individually. Not that I would have the black box though :)
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