GPS Tracking And Car Insurance
By Alex Hunt
1966 Ford Fairlane
GPS tracking is a central part of the "Usage based Insurance" policies also known as "Pay as you Drive" (PAYD) schemes. These are becoming a more common feature of modern driving insurance these days and are believed to offer drivers a cost effective alternative to traditional insurance. Consumers who use their cars less will also find that they have a reduced impact on the environment as a benefit from the PAYD initiative. These insurance premiums rely on a vehicle being fitted with a GPS tracking system that allows the company to follow the movements and driving patterns of the driver.
At its simplest "Pay as you Drive" calculates a drivers mileage based on the results of the GPS tracker and customers are charged accordingly. However there are more sophisticated policies that take into account the amount of driving, vehicle speed and how and when you drive. The coverage is monitored each day by a GPS tracker that relays the cars movements through to the insurance firm, who in turn calculate the premiums.
The GPS system allows for immediate telemetric calculation of the owners usage and can take account of fluctuations in the cars usage. If drivers opt for public transport to take them to work or spend the day working from home, therefore avoiding the rush hour, they are likely to see a decrease in their premiums.
Benefits of GPS tracking based insurance is the potential cost savings to the driver, access to affordable insurance, especially for younger drivers and increased security should the car fall victim to crime or in the event of a breakdown. A GPS tracker is also likely to alter high-risk drivers attitudes as they see the impact their driving has on insurance costs.
Users also believe that the system benefits safe and considerate users and penalises irresponsible drivers more, leading to a fairer and more equitable system. It also encourages drivers to act in a social and environmentally friendly manner, rewarding low usage and careful driving on our roads.
A possible pitfall from GPS trackers for insurance purposes include the fact that prepaid insurance is based on predicting driver risk rather than past history. This can lead to higher premiums for fast but safe drivers against the cost to slower but erratic ones. People may also feel that the continuous use of GPS tracking by an insurance company constitutes an infringement on civil liberties and customer privacy.
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Article Source: http://EzineArticles.com/?expert=Alex_Hunt
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