Flaw in pay-as-you-go car insurance

Drivers can earn cheap car insurance by signing up to test a new pay-as-you-go service – but the Insurance Blogger can spot a flaw in the offer.

Aviva wants 5,000 drivers to try out a new smartphone app that records data like acceleration, braking and cornering over a 200 mile test drive.

The app then gives the driver a score which the company translates in to an insurance premium offering up to a 20% discount.

Drivers who fall below the test standard will not face a penalty premium, but will just pay the same price for their insurance.

The advantage, claims the insurance firm, is the app is downloaded to a smartphone and does not involve fitting any extra black box technology in a car.

But hang on a minute…what’s to stop a young road racer from asking his gran to drive the car for the test, and hopefully benefit financially from her more careful driving?

“We believe this innovative use of smartphone technology will benefit all safe drivers, regardless of age or gender,” said Aviva retail director Steve Treloar.

“Unlike traditional black box telematics, the app only needs a small amount of data to create an individual driver profile. And because the app is free to download and uses the customer’s own smartphone, there is no need for motorists to have a black box installed in their car.

“For those who complete the app trial, we will provide feedback on their driving”.

Drivers already paying between £200 and £400 could earn discounts of up to 10% and those with premiums above £400 could earn discounts of up to 20%.

Motorists with premiums below £200  receive no discount as their claims history, type of car and driving experience suggest they are already amongst the safest drivers.

“We need a wide range of motorists to test the proposition and help us develop the final product and customer experience before we bring it fully to market,” said Treloar.

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