Real time and location based car insurance

The British insurance company Norwich Union (Aviva) has started a pilot project where real-time and location based car insurances are tested. So your monthly amount of car insurance you have to pay is monthly calculated on times and places you have driven last month. The people who participated in the pilot paid a lot less for there insurance and became more aware of the way the drive.

I pay half as much for insurance and think twice about using the car during the expensive times that are considered high risk for accidents

The details of the journeys are collected by a kind of black box device inside the car. Every night via a mobile phone link the data is automatically transmitted so the insurance company can produce an customized monthly bill. The system is from Trafficmaster, a British company which also does navigation and fleet management. The idea is that people should be charged for the risks that they take while driving, not the risks taken by others. We find that knowing the time and location of a driver gives a pretty good indication of their accident risk.

"But what is most exciting is that these insurance products — for the first time ever — actually encourage people to reduce dangerous behaviour

Some of the additional functionalities are navigation, real time traffic information and tracing when a car is stolen. Of course are the first rumours about privacy. I personally find this service an excellent one and one which can help other companies to be more customer oriented and reshape there business models. It also gives us an inside look in the near future where everything is connected not only products like cars but also individuals. Imagine if insurance companies can reduce the speed of your car from a distance when they think you are driving to fast or dangerous. Or raise your personal insurance fee when walking through a busy street. What do you think of such a future? Real time and location based insurance? And who would take such an insurance when it reduces your bills? It even solves the traffic jams. More information: Norwich Union, International Herald Tribune