For consumers worried about the ever-increasing costs of fuel, installing a telematics solution could assist in decreasing the cost of your insurance premiums.
Ever-increasing fuel prices are pushing South Africans to explore every avenue to reduce their costs. According to the Automobile Association (AA), the cost of petrol is predicted to go up to R17.90 by the end of the year.
By using telematics technology and software applications, motorists could help reduce the premiums on their car insurance.
“Telematics apps are a relatively new technology that drivers could install on their smartphone to track their driving behaviour,” explains Vera Nagtegaal, the executive head of Hippo.co.za.
Nagtegaal says that telematics technology has evolved over the years, and that nowadays it simply means downloading an app on your phone in order to access the technology.
“In using your cellphone, certain metrics are factored in to track driving behaviour. These include tracking your cellphone use while driving, acceleration, speeding, distance, route risk index, time of commute and braking.”
She explains that, in some instances, insurers could request you to enable this technology to receive information that can be used to assess your driving habits and adjust your premium in response to your driving behaviour.
“From this behaviour, your insurer can establish your risk profile, which gives them an idea of how likely you are to have an accident.”
Some insurers could offer you either an upfront discount on your premiums or cash back rewards based on good driving behaviour.
“This benefits any driver who decides to use a telematics app to monitor driving behaviour, but can be particularly useful to drivers who are usually considered to have a high-risk profile. For instance, men who are 25 years old and younger are statistically considered to be more prone to risky driving behaviour. The use of telematics could prove that they are driving responsibly in order to reduce their loaded premiums,” Nagtegaal says.
In addition to the potential discount on premiums or cash back rewards, telematics tracking could provide a welcome relief for parents of teenagers or students who are worried about their children’s driving behaviour.
Nagtegaal says that the reports could be used to discuss risky behaviour and reward good driving in younger road users. Not only does telematics track and report on your existing driving behaviour, but it is also likely to improve the way you drive, simply by virtue of being there.
“Drivers become conscious of their risky behaviour and attempt to modify it for the financial benefits, which results in an overall security benefit for them and their families as well,” Nagtegaal points out.
But drivers needn’t be reluctant to, for example, brake suddenly to avoid an accident, as single instances won’t be likely to affect their overall score.
“Telematics is about ongoing monitoring and reporting, and single incidents won’t be weighted against a consistent record of good driving behaviour,” she adds.
This information can also be used when a car is being sold to prove that it has been driven carefully. Should an accident happen, a driver can use a telematics report to negotiate a claim or premium increase, with proof of their driving behaviour in hand.
“While saving money is usually the biggest motivator for drivers to install a telematics app, the true benefit lies in the overall improvement in driving in order to reduce the risk of having an accident. After all, we shouldn’t be driving well to save money; we should be driving well to stay alive,” Nagtegaal concludes.