Innovations That Matter

'Pay as you drive' insurance rewards safe young drivers

Mobility & Transport

New drivers typically face higher insurance premiums than others do based simply on their age and lack of experience. Recognizing that many such drivers pose no higher risk than do more experienced drivers, The Co-operative Insurance recently launched a Young Driver Insurance package in which premiums are based on the driver’s actual skill, as recorded by an in-vehicle monitoring device. Much the way drivers of all ages can use State Farm’s Driver Feedback app for advice on safer driving, so UK-based Co-operative’s Young Driver program targets drivers aged 17 to 25 with its in-car Smartbox. Participants in the “pay as you drive” program begin by getting a Smartbox fitted into their vehicle. Then, they get assessed every 90 days on four key driving behaviors: braking and acceleration; cornering; speed; and the time of day in which they drive. Data is sent via satellite to Co-operative, which uses the information to calculate the driver’s premiums. Participants, meanwhile, can log into a personal dashboard to see their data and receive advice. The Young Driver program is on average GBP 328 cheaper than competing programs are, Co-operative says, and the company expects more than 80 percent of young drivers to save by driving safely. The minority who don’t, however, could see their premium increase by as much as 15 percent; those whose excessive speeds warrant a court-imposed driving ban will have their policies canceled, Co-operative says. David Neave, director of General Insurance at The Co-operative, explains: “It is a fact that many young people are simply being priced out of owning a car due to the escalating cost of motor insurance for young drivers. To ensure we do not end up with an entire generation priced out of car ownership, we are giving them a chance to prove themselves as responsible drivers and dispel the assumption that all young drivers will drive badly and have accidents.” Indeed, the more technology advances, the fewer assumptions need be made about many aspects of life; instead, concrete data can step in. Other insurers around the globe: what about you? Spotted by: Neil Infield



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