Is telematics going to take over the insurance world?

Van insurance news roundup: 7 days ending 13 March 2014:

If you’re tired of shelling out an arm and a leg on your commercial van insurance, worry not – it looks like telematics-based insurance is poised to take over.

If you’re unaware of the technology behind telematics-based car insurance, it’s not really all that complex. It’s based on the same tech that powers your satnav, only instead of providing you turn-by-turn directions it instead spies on you whilst you’re behind the wheel. Oh yes, insurers will try to spin it to a more positive light but let’s be completely honest: a telematics device, once fitted, keeps close tabs on your motoring habits. Step out of line – drive too fast, brake too hard, take corners too recklessly – and your insurance rates will go up. Stay within the law and behave yourself and your car insurance costs will decline.

It’s good business, as long as you don’t mind giving up your privacy rights in exchange for cheaper van insurance, but with the typical insurance provider more interested in making as much money as they can off you telematics is bound to become incredibly popular. In fact, a new research study released this week discovered that telematics-based insurers are in a prime position to take the world by storm – and British drivers are ready to switch over in order to save some serious cash.

It isn’t just British drivers either, according to another news story that broke this week. US mobile giant Sprint is announcing that they will be providing connectivity for telematics devices in the US. That’s not all, though – AT&T, one of Sprint’s main rivals in the US telecoms market, is also rapidly approaching the unveiling of a similar service that it will market in direct competition to Sprint.

Now I know I’m a bit critical of telematics insurance, but I do have to admit that it could be an excellent way for commercial van fleets to save cash in the long run, especially since it encourages employees to drive more carefully (and that there’s direct evidence of whether or not they’ve been behaving according to the telematics data).

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