We’ve reached a tipping point Insurance companies have done tremendous work in incentivizing safer driving among teen drivers. They’re using innovative telematics technology to make this momentous achievement a reality. Today, over one million cars are outfitted with telematics boxes that monitor driving behavior and patterns. Insurethebox, another leader in the space, has mined more than three billion miles of driving experience data since launching in 2010. This wealth of data has given us a greater understanding of driver behavior and associated claims.
Telematics insurance is proving to be a game changer, particularly for young drivers. Drivers who prove to be low-risk have the potential to net a jaw-dropping 37% average savings on their premiums. Even as a newly qualified driver, you would still save an estimated £2,000 over your first two years. Now that’s quite the departure from standard insurance offerings! This creative method works to directly incentivize safer driving behaviors. It aims to minimize the impact of the negative statistics regarding young driver deaths.
Our recent research shows that one-in-three drivers speed for the conditions, going too fast to stop safely in case of an emergency. For young, inexperienced drivers, speeding doubles their risk of being involved in a fatal crash. New research shows that people who speed 20% of the time are 87% more likely to have a crash. For young drivers, especially those under 25, crash risk triples at night. This places them at a tremendous risk of harm compared to older drivers.
Howard Collinge, an expert in behavior change, stressed the need to measure how people are driving.
“We see a trend of very fast and erratic driving which is different from the driver’s normal behaviour. Quite often it’s during the day rather than at night,” – Howard Collinge
Making safe driving a priority is part of the answer, particularly considering 80 percent of young driver fatalities happen on rural roadways. Challenges As we often discuss here, country roads with 60 mph speed limits are some of the deadliest roads in America because of the challenges they present. Crispin Moger points out that many newly qualified drivers are often too intimidated to drive on motorways, leading them to navigate more dangerous rural routes.
“Many newly qualified drivers still are too scared to drive on motorways. This results in them spending more time on rural roads. With narrow lanes, blind corners and slow-moving vehicles, these can be far more dangerous than the motorway: according to information published on gov.uk, 80% of young driver fatalities occur on rural roads,” – Crispin Moger
Telematics-based insurance providers such as UK-based Insurethebox, Marmalade and Coverbox are addressing these challenges head-on. Instead, they reward the most careful drivers with lower premiums. The new strategy will involve warning drivers who speed or engage in other dangerous driving behavior with automated text messages and emails. Vaughan, a consultant with deep experience in the industry, describes how powerful this kind of communication can be.
“We contact the ones who are driving too fast through text messages and emails. We give their driving a red, amber and green status. People who we contact reduce their speed by an average of 15%,” – Vaughan
Vaughan highlights how speed continues to be a dominant factor in road danger.
“If there’s one thing young drivers need to do, it’s to slow down. Speed is the single biggest contributor to risk. About one-third of drivers drive too fast for the conditions on the road,” – Vaughan
Curiously enough, fresh grads drivers, 17 year-olds, are said to be safer drivers than their marginally older counterparts. Vaughan explains that this sense of trepidation fades as they get further into their careers.
“Seventeen-year-olds are not the worst drivers. Actually, many new drivers at age 17 drive really modestly in speed terms. Maybe they are just gaining confidence. Their behaviour then deteriorates over the age of 18. It is two to three years after obtaining a licence that speed risk is highest,” – Vaughan
Telematics data can be used proactively to encourage safer driving. It’s a challenge to the historical discrimination baked into pricing models used by insurers. In the clip below, Vaughan explains how this new data can be used to develop an insurance landscape that is more equitable.
“The data supports the old insurance model where males were historically priced more highly than females. On average, they do drive faster – that’s what the telematics tell you. But you can use telematics to prove that you are a good driver, irrespective of your gender,” – Vaughan
In certain cases, these insurers have gone above and beyond to take extra steps to incentivize their clients to do even more to act responsibly. Marmalade follows through when they flag a trip for aggressive driving habits. Then, they’ll begin contacting customers to talk through the problem.
“If a journey is flagged as red, meaning it contained some potentially dangerous driving, we will call our customers to discuss the problems. And yes, if it keeps happening, our customers understand that there will be a charge of £250. This is a hugely effective disincentive to poor driving, and over 95% of our customers consistently drive well,” – Marmalade
For some of these young drivers, just by interacting with telematics has led them to be more introspective about how they’re driving. Elaine Lancashire, Fleet Manager at Leicester City Council, talks about her experience and implementation of telematics technology.
“It makes me think about how I’m driving,” – Elaine Lancashire