Is telematics actually providing young male drivers with the more competitive rates it promises? With two young sons about to take to the roads, David Waring finds out.
Being a parent brings with it many seminal moments in the lives of your children; first steps, first words ...first time behind the wheel.
While most are joyous occasions, the last of these conjures the most complex emotions. The pride of giving your offspring independence quickly morphs into dread - the dread that comes with knowing that your nearest and dearest will be exposed to the dangers presented by others on the road, as well as those that result from the combination of their own, yet to be honed, driving skills and adolescent testosterone overload.
Even worse, you know that you will have to foot the bill.
My two eldest boys, Toby and Jake, are 17 and 19 and, for as long as they've held provisional licences they've been dropping hints about a car. A car which obviously was to be funded by the Bank of Dad.
Although I've only been living up north for the last eight years, I have to admit the Yorkshire trait of being ‘careful' with money has always come easy to me. However, the endless talk of Saturday jobs to help contribute to the costs of said car fell on deaf ears and, with Mrs Waring keen to retire from her role as part-time cabbie, I gave in to their demands during a weak moment and bought them a car last Christmas.
While not something that would rev Jeremy Clarkson's engine - a one litre Vauxhall Corsa (0 to 60 in 10 minutes) it's an appropriate start. Besides, anyone who has teenage children knows the car is only one half of a rather expensive equation and, having taken advice from a number of motor underwriters, I knew that this highly underpowered machine would be looked upon favourably by insurers.
Buying insurance for young drivers is not as easy, or indeed as cheap, as the meerkats and opera singers would have you believe. Provisional driver cover is, unsurprisingly, not a problem and there are plenty of reasonably priced and flexible schemes to choose from but, cover once qualified is a different matter. Of most surprise were the telematics-based products. Any parent would be seduced by the message, pay less for insurance while modifying the reckless teen racer driving behaviour, fostering an attitude of responsibility and respect for the road.
However, the reality couldn't have been more different. Hunting for quotes, one provider offered me a policy at £4200, while my current insurer was unable to add a telematics policy to my existing multi-car deal, insisting on adding a regular policy to the scheme instead which, ironically, was cheaper than their telematics product. If the Gender Directive has had the effect of reducing rates for young male drivers, 2012 prices must have been even more eye-watering.
Insurers, it seems, are as reluctant to get my boys out on the road as I am. The pricing of telematics products still seems to be way off the mark. It might be because they are nervous about attracting too much volume in this unknown territory, or it could be because they are still trying to feel their way with the technology and relatively scarce driving data. Either way, when regular motor cover costs less than its telematics counterpart it makes a mockery of the entire proposition.
The raison d'être of telematics is that insurers should be able to select good drivers, price risks more accurately and improve their loss ratios, not squeeze more out of motorists by driving up the price.
Even the incentives are wide of the mark; one of the providers I spoke to offered cash back as a reward for good driving. But £100 per quarter on a £3500 policy just isn't enough of a carrot. In fact, most of the sweeteners on offer are aimed at the policyholder and not me - the parent who forked out for the cover.
However, my boys were able to provide me with some consolation. Jake failed his test for driving on the wrong side of the road and Toby will also have to re-sit after pulling out in front of another car at a roundabout. Given the apparent incessant dumbing down of academic standards to hit government targets, it's good to see that at least one qualification is tougher now than it was when I were a lad.
Second tests are already booked. Hopefully, by the time I have to take the plunge, the market will have a better grasp of how to price, analyse and market telematics-based products.
About the Author
Director, Insurer Division, European Region - "Making insurance a painless process for all in the value chain from end consumer through intermediary to carrier – it doesn’t have to be so hard!”More Content by David Waring