Drivers are always looking for ways to cut the cost of car insurance. What many people don’t realize is that insurance companies are constantly looking at new and innovative ways to keep their costs down, as well.
Car insurance is an industry based almost entirely on risk—the insurance firm takes a gamble (an educated gamble perhaps, but still a gamble) on the fact that you are less likely to have an accident than other drivers. The more careful drivers firms have on their books, the less money they have to pay out for claims and accidents.
Promoting careful driving is one way insurance firms keep their costs down. However, it is easy to preach to drivers about driving more carefully but much harder to make sure motorists actually heed the advice and maintain careful driving practices on the roads.
One method that insurance firms have used to keep the risk of motor accidents down is to fit the cars of their customers with car monitors.
A car monitor is a device that is installed in the car to check the readings and data of certain instruments in the vehicle. The monitor can measure a range of things from how hard the brakes are pressed to how many miles the car has been driven. Insurance companies are using the monitors to reward drivers who display positive driving behavior.
For example, if you only drive the car on the weekend, keep to low speeds and use the brakes sparingly, you are less likely to either wear out your vehicle or be involved in an accident than someone who drives every day at high speeds. The monitor picks up on these driving habits and relays the information back to the insurance firm. This often results in an adjustment to your premiums to reward you for your positive driving.
The benefits of having such a device installed in your car depend greatly on your own driving habits. If you are a safe driver with a clean record, you keep your speed down, and you avoid dangerous decisions on the road, you are likely to be able to save on your insurance bill.
In fact, car monitors are more likely to provide you with a much more accurate premium rate based on your personal driving habits than traditional methods. Before these monitors existed, insurance companies simply looked at a range of factors such as your age, the amount of time you’ve been driving a car, and what type of car you own to work out how much you pay.
However, this figure is always compared to a national average or some other statistic. For example, if you are a 21-year-old male driver, you are deemed to be a higher risk on the road and your premiums will be higher: in short, with the old system, you would always find yourself penalized when it comes to your premiums costs because you happen to be a young male, no matter how safe you are on the road or what your driving practices are like.
However, with the use of a car monitor, the insurance firm can deduce exactly how good a driver you are and can offer you discounts accordingly, in some cases as much as 30 percent off their standard premium rate.
Of course, any such new measure is bound to come with its own problems attached. Personal space and security is a big issue as drivers can feel mistrusted and almost invaded with an intrusive device such as a car monitor attached to their car.
There is nothing that is going to damage a relationship between a driver and an insurance firm more than a sense of mistrust, especially if the driver has done nothing wrong. Many of these car monitors can also be off putting as they emit loud noises when brakes are pressed too hard or when the car comes to a stop. Such things are a distraction and, in extreme cases, could even lead to an accident occurring where there wouldn’t have been one.
It is also possible that car monitors could result in arguments between families. For example, if one person in a household is a safer driver than the other on a car that is insured on the same policy, the premiums will not be discounted due to the poorer driver’s conduct, leading the safer driver to feel perhaps understandably annoyed that they are having to pay more money for someone else’s bad driving.
Will These Become a Legal Requirement?
It is hard to say at this early time whether these monitors will become a mandatory installation in all vehicles. At the moment, they are available in 33 states, and one out of every four drivers who are offered the devices with the promise of saving money has one installed. These numbers show they are certainly popular.
However, the invasion and privacy issues must be addressed before any national legislation regarding the monitors seems likely. It is also worth pointing out that, at the moment, insurance firms do not penalize drivers whose monitors have highlighted their bad driving practices—they have only rewarded the good drivers.
However, should this change, this will also be another consideration that may thwart any attempt to make the monitors a legal requirement as they will become unpopular.
If you are a careful driver who is secure in your knowledge of good driving habits and sticks to the rules as often as you can, then it may indeed be a good idea to get a car monitor installed in your vehicle as you could make a substantial savings on your car insurance. If you are less sure of your driving practices, you may want to hold off on getting a car monitor.
Of course, they may always become a legal requirement in the future, so the only way to really be sure you are keeping your premiums as low as you can is by updating your driving practices and losing the old habits that you have picked up that may damage your reputation as a driver.