There has been a myriad of reports in the news recently about how car insurance prices are soon to increase due to the changes in EU legislation meaning that car insurance companies can no longer provide cheaper quotes due to a person’s gender. Also, due to changes in the way compensation to those that are hurt in car accidents is paid car insurance prices are also going to rise this year. Previously, those injured in car accidents were paid in one lump sum, however now it will be paid monthly and cold even increase with inflation, meaning that the costs are being passed on to drivers.
So car insurance companies are coming up with innovative ways to save their customers money, and one of the most popular is introducing ‘smartboxes’. Smartboxes are installed in drivers’ vehicles and monitor the way that they drive, including how fast they go, how often they break, and how sharply they take corners. Insurance provider the Co-Operative is planning on offering drivers cash-back if the information provided by the smartbox shows they are a safe driver. This method is a complete reversal of the way the car insurance industry usually works, as before costs were determined by risk at the beginning of the policy, but now drivers will be able to get money back at the end of it.
There are some who are concerned about the new smartboxes, such as people who have driven for years and have picked up some bad (but not necessarily dangerous) habits along the way. However, these boxes could actually improve the way people in the UK drive, meaning that there will be fewer accidents on the road and therefore insurance providers will be able to offer cheaper policies in the first place. Furthermore, young drivers that have recently passed their tests will be more likely to keep up good habits such as sticking to speed limits and paying extra attention to traffic on the road.