While the idea has been kicked around for quite some time, now a satnav firm has joined forces with a motor car insurance provider in order to bring GPS-enhanced insurance to drivers, experts say.
Satnav specialists TomTom have allied themselves with a selection of car insurance companies in order to provide an insurance product that uses telematics-based technology to monitor motorists’ driving habits. The new product, which is being billed under the ‘Fair Pay’ brand, works to provide discount car insurance to those who drive in a responsible manner.
TomTom Business Solutions’ managing director, Thomas Schmidt, remarked that the firm’s entry into the insurance market with its satnav technology puts it head and shoulders above its competitors in innovative insurance products. The process itself for using the new service is simple, as drivers interested in demonstrating their safe and responsible motoring can sign on with a Fair Pay provider, earning them a special TomTom satnav which will keep track of a driver’s activities behind the wheel while the car is in motion before sending its data back to the insurer.
This approach to insurance premiums could effectively eliminate traditional risk assessment methods, which have been criticised for their reliance on factors such as vehicle type, age, gender, or postcode. Instead, safe drivers will be given reduced rates as a reward for demonstrating that they carry less risk to an insurer than other drivers on the road.
Many insurers have offered similar services in the past, with a telematics device being fitted to motorists’ cars in order to record their driving habits, but this new TomTom-Fair Pay alliance represents the first time a satnav firm has gotten in on the act directly, experts say.