Peter Lee's guide to telematics
Leading van expert Peter Lee explains how telematics works and what it means for van insurance for today and the future.
DL4B: There’s been a lot of talk about telematics. What actually is it?
Peter: The idea of telematics can be confusing, as different insurers have different solutions and technology. Put simply, the concept behind telematic insurance is to look at the way is driven in real time. This is monitored and recorded via a GPS device.
The information collected is used to understand how safe the driver is on the road and assess the risk of them having an accident. The van insurance premium offered to the driver, or potential premium discounts, will then change accordingly. The idea is to reward safe driving.
The most obvious advantage for drivers is reduced cost and more tailored insurance premiums, which will be based on how the individual actually drives, rather than the average attributes of a driver’s age group or profile. Telematics devices are optional, but many people use them to reduce risks and premiums.
Currently no one is obligated by law to use one. However certain high risk driver categories, such as young drivers who have just passed their test, may be obligated by their insurer to fit one in return for cover.
DL4B: How does this telematics capture and record the data?
Peter: There are two different ways. The first is by installing a so called ‘black box’ recorder into a vehicle. The box is fitted by a professional mechanic and does not interfere with the workings of the vehicle.
The second solution is via a telematics app that people download to their smartphone. The app uses the smartphone’s GPS functionality to monitor driving performance. The mobile app doesn’t have to be turned on permanently. Usually the insurer will request you drive a set distance, such as 250 miles with it turned on, which can be accumulated via a number of shorter journeys. The results are then uploaded for review by the insurer, so they can help determine an appropriate premium.
DL4B: What does the telematics device actually measure?
Peter: Different insurers will look at different driving behaviours and options. Telematics devices commonly record:
- How controlled a driver is when accelerating
- How controlled a driver is when braking
- Driving speed (correlated against the type of road)
- Length of time driven
- How fast a driver corners
- Some devices are able to let a driver know about a potential problem with the vehicle
- Fleet van companies use them to know where all their vehicles are at any one time, and also assess the performance of their drivers
It may also record:
- A vehicle’s location
- Act as an anti-theft device (enabling tracking for recovery) – it might be good to put a Telematics sticker on your window, so people know.
- Personalised history of driving performance
DL4B: If I’m a tradesman, will this box track everywhere I go and every job I attend and give the data to the Government?
Peter: At present data is purely used by insurers to build a picture of driving habits and behaviours; it’s not being shared with any third parties. Personal data isn’t passed onto the Government and has to be stored in accordance with the Data Protection Act 1998.
DL4B: Will the police be informed if I speed, or corner too fast?
Peter: Insurers are under no obligation to pass on evidence of any speeding or motoring offences. Also, with the apps currently on the market you decide whether to upload the data. You’re in control of your driving history and whether you wish to share this data.
Obviously, if you habitually speed and share this data an insurer will view you as a higher risk than the average driver – but surely this is to be expected.
Peter Lee is a leading expert on vans and the founder of the Transit Van Club. Visit www.transitvanclub.co.uk for more information.