The practice of car insurance companies relying on the ‘postcode lottery’ to determine car insurance rates for their customers needs to stop, one industry expert recently urged, adding that new technology needs to be embraced that permits motorists to be judged on their merits.
The price of motor car insurance cover has been rising inexorably over the past few years, leaving drivers already hard-pressed to cope with record petrol prices stretched thin in their efforts to keep their cars on the road. In fact, an insurance premium index published by the AA has found that prices have increased by 15.3 per cent in 12 short months, raising the national average to nearly £1,000.
One of the key factors in premium increases is the so-called ‘postcode lottery,’ where geographical differences between otherwise identical drivers can result in massive premium price fluctuations. Many argue that this practice is an unfair one, especially in cases where a motorist with a safe driving record moves only a few houses down the road and ends up with massively inflated premiums.
There are flaws inherent in the way insurers use postcodes to determine prices, according Johan van der Merwe, an insurance expert that has an ownership stake in Coverbox, an insurance provider that specialises in ‘black box’ telematics technology. The satnav-linked tech, which monitors how, when, and where a car is driven, can result in premium prices that are much more fair and equitable, as they are based upon empirical evidence instead of statistical analysis of sometimes marginal factors such as the car owner’s home postcode, the insurance expert said.