Cheaper car insurance via TomTom tracking?

TomTom has found an innovative new use for its sat-nav systems in the insurance industry.

The company has partnered up with insurance firm Motaquote to launch “Fair Pay Insurance”, which aims to tackle the rising cost of car insurance.

Younger drivers lacking no-claims bonuses can be charged a small fortune to be insured, but not if they agree to have a TomTom sat-nav system installed to monitor their driving.

Telematics technology, as it’s known, monitors your driving and can detect whether you speed, take corners too fast, brake overly hard – basically evaluate whether or not you’re a “good driver” (by its terms, of course).

And should the data indicate that you are a good driver, your insurance premiums will fall. Of course, should it indicate that on the journey home last Friday night you drove straight across a roundabout and hit three separate dustbins on your street, then your payments will be upped.

TomTom and Motaquote aren’t the only firms headed in this direction, either. The AA is also due to launch a telematics insurance scheme, with Direct Line considering the move as well.

Fair Pay Insurance notes that it is different because unlike other companies offering telematics systems, they give you a competitive price from the get-go, with the firm assuming that you’ll be at least a reasonably careful driver if you’re intending to take out one of these policies.

Not many boy racers are likely to be signing up, let’s face it.

Fair Pay Insurance noted on its website: “Unlike other telematics car insurance firms we will actually reward you with a competitive car insurance price up-front based on your opinion of your driving style.”

“In addition we will also provide you with the technology via our partners at TomTom to monitor your own driving so that you can adjust your driving style if you want or need to. As your driving improves – so will the car insurance premium you pay.”

Of course, there are big brother type issues with this tracking technology, and what might be done with the data collected.

Motaquote does say that data may be used for purposes other than its “core need” of adjusting insurance charges, giving the example of traffic analysis. All data is anonymised in this case, the company insists, and any data will only be supplied to “those who are contractually required to maintain its security and accuracy”.

The only other issue is the accuracy of the data, or more specifically, how it’s used to quantify a “good” or “safe” driver.

While we’d assume outright errors in data are likely to be rare – though not impossible – the interpretation of the data could certainly be an issue. And arguing the toss with an insurance firm, well, good luck with that, as they say.