Car insurance telematics is a Pandora’s box for drivers

Car insurance quotes are about to change over the next few months as providers get to grips with new laws that stop them charging based on a driver’s gender or age.

New European Union rules will scrap the traditional costings based on risk assessed  according to whether a driver is male, female, young or old.

Instead, some companies have tested a box of tricks called telematics.

Telematics is a Pandora’s box for drivers. The problem for car insurance firms is how to maintain their profits when they have to change their charging structure.

Until now, insurers have based the costs of car insurance policies on risk calculated against a range of variables – gender and age are just two. Others include the type of car, place where the car is kept  and the driver’s job.

Telematics adds a new dimension to car insurance. Instead of charging a driver based on the risk of a claim according to the group they belong to – like young drivers under 25 years old or women over 55 – each driver will pay a premium according to his or her personal driving profile.

The black box records the time of a journey, speed, steering and braking among other things.

This gives the insurer a whole new world of costings – young men driving at night are more likely to crash than other drivers, so why not put up the cost for being out between 11pm and 6am? This unofficial curfew limits risk.

Now consider the other aspects of the black box – what if the police have access to the data?

Not only can the information prove how fast you travelled, but if it is linked to a GPS system, which it surely will, people can see where you have been and when.

This could be the end off roadside cameras and the start of spy-in-the-sky speed traps tracking drivers by satellite.

Technology is a boon – but can also infringe civil liberties if the appropriate safeguards are not included from the start.

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