Telemetry-based auto insurance is making its way across the pond, as GPS specialist TomTom announced it has signed a deal with Welsh insurance broker Motaquote to begin offering discounted coverage to drivers who agree to share data on how, and how much, they drive. 
Motaquote’s new Fair Pay product would offer upfront discounts to those who agree to use TomTom’s satellite navigation system and the car’s own internal computer to record their driving behavior, including how hard they brake or how sharply they take turns, as well as other traffic and telematics data. Rates would be adjusted upward for those whose traffic logs show patterns of risky driving.
Similar programs have a longer history in North America. Progressive Insurance began experimenting with telemetry-based underwriting and rate-setting in the late 1990s before beginning to roll out its MyRate product nationwide in 2008. The company now offers the program in more than 30 states as the Snapshot product, while licensing its original technology product, called Autograph, to be marketed in Canada by Aviva Insurance.
But while many states now permit auto insurers to base rates on mileage, broad acceptance (by either regulators or the general public) of rate-making tied to monitoring specific driving behaviors still might be a long way off. One reason that it might be poised to take off in the U.K. (and, indeed, across Europe) is a recent ruling by the European Court of Justice requiring that insurers cannot use gender as basis of rate-making. As PC Pro magazine put it:
The ECJ ruling said it was unfair to charge men more for insurance than women – as is often the case, with women paying as much as 40% less – and has forced a rethink on pricing.
From December, insurance companies will be barred from basing premiums on gender and are looking for other ways to group drivers according to risk.
According to the AA, telemetric premiums will grow in popularity because people are less concerned about Big Brother-style monitoring than they used to be.
