‘Black box’ technology could drive down car insurance costs
The Department for Transport (DfT) has said it will work together with the motor industry in a bid to drive down the number of fraudulent claims for whiplash and other injuries, which would reduce the overall cost of car insurance from providers like Staveley Head. In its response to a report by the Transport Select Committee, the DfT said it will support the use of telematics - "black box" technology that provides additional data on crashes for insurers and police - to make insurance fairer and drive down the cost of premiums.
Telematics not only helps to determine the causes of accidents, ensuring more accurate insurance payouts, but can also be used to reduce the cost of policies on an individual basis. By monitoring driver behaviour, such as braking, acceleration, cornering and speed, these systems can demonstrate to insurers that some customers are more careful drivers than others.
The DfT response also supported a ban on referral fees in personal injury cases, saying the government is "concerned with the issue of personal injury claimants being actively encouraged to pursue their claims for compensation". It is hoped that the regulatory ban will prevent solicitors and claims management companies from paying, and insurers from receiving referral fees after accidents. This is expected to cut off the source of funding for other players in this dubious market, such as repair garages and credit hire services.
"The cost of insurance is an important issue with significant economic and social impacts for all motorists, especially for young drivers," said the DfT response.
Further plans include giving insurance companies access to the DVLA driver record database, allowing them to check the details given by motorists applying for cover, in an attempt to curb fraud and give insurers more information on their customers. The insurance industry itself will contribute £1 million to the cost of the scheme, which is expected to be in place by 2014.